The silver lining in the black hole of COVID

[iamlost]

The following is US-centric aka its US (courtesy of the Bureau of Economic Analysis of the United States Department of Commerce) data. That said, many, most? WebmasterWorld members are American or target the US market to some degree.

30 years ago personal savings as a percentage of disposable income was about 10%. That slowly decreased to 3.3% at the onset of the 2007 housing bubble bust. By end of 2019 was back up to 9.6%.

And then came COVID.

But.

Whereas, in 2009, the US Congress passed a $800billion with a ‘b’ USD ($400billion in each of 2-years) stimulus package... in March 2020 Congress passed a $2.2trillion with a ‘t’ USD package... 5.5-times greater on an annualised basis.

Plus looks likely to add another $1-trillion with a ‘t’ USD before Christmas for the the next 6-months.

Which explains, in part, why the current percentage of savings as a percentage of disposable income is about 15%...

And why UPS has put a cap on Amazon deliveries...

And many other online B2C sites are booming...

And, given a viable vaccine availability/rollout over the next 6-12 months the economy should rebound strongly.

Minus the far too many businesses that failed in the interim...

And the sorrowful number of people who will have died or have been chronically damaged.

Colour me smiling through the tears.

[LifeinAsia]

You're only smiling because you won't be saddled with the increased taxes for next many decades to pay back all the stimulus money. Not to mention the impending inflation surge.

And while the savings rate may be temporarily inflated because of the stimulus checks, part of that may also be due to people not paying their rent/mortgages (not sure if that's factored into the rate or not). And many people are also racking up debt because of the cheap supply of money.

I will say that COVID has accelerated the next industrial revolution that is going to permanently end a lot of menial jobs (as well as a lot of white collar jobs as well).

And I will also say that it's been a boon for many online sites and delivery services.

[tangor]

All those "b's" and "t's" being tossed around assume the economy will be be operating ... but with 30% of small biz about to close permanently from covid shutdowns and other factors, a confused labor force and more changes to come, and the 9 month moratorium on rent will result in catastrophic failures throughout the real estate industry ... there will be a global shutdown the likes we (of this century) have ever seen before ... and might make 1929 look like a dimple on a pickle.

Somebody has to provide the dollars (pick your currency!) to cover these debts ... and if the ones who are taxed are out of work, there won't be any funds to support these "paper promises" being made.

Meanwhile, I am NOT buying popcorn for this movie ... I might need those funds later!

[Marshall]

You're only smiling because you won't be saddled with the increased taxes for next many decades to pay back all the stimulus money. Not to mention the impending inflation surge.

Not to mention people are going have to payback anything that has been deferred: mortgages, student loans, payroll tax, and so on. Surprisingly, many are ignorant of the fact they will have pay it back, especially the payroll tax. Seems they do not know the definition of deferred.

[iamlost]

Yes, I have got in a good supply of popcorn because the coming soap opera starring the world’s countries in their varying recovery behaviours will set - and likely significantly alter - the economic power structure.
Note: as will how behaviours influence how soon or late their economies recover; quite an evolutionary experiment, real reality TV.

As a Friday funny aside: in at least two cases in two jurisdictions (Belgium, Quebec) courts have agreed with commercial (not residential) tenants that mandated COVID closures are an event of superior force causing an inability to operate and generate revenue and so are released from the obligation to pay rent for the duration of such closures.

[engine]

Silver linings, winners and losers, they are all out there at every turn of Earth, and circuit of the Sun, pandemic or not.
Some aspects are more pronounced than others with Covid-19, but one thing's for sure, all that Government borrowing is borrowing on our behalf: It's not free money, and it's not theirs.
One positive thing is that interest rates are low and borrowing for Governments is easier, which means it'll cost ever-so-slightly less.
Astute Governments will be using funds to the benefit of the economy, which in turn benefits individuals through jobs, which creates wealth and generates taxes. Simple economics, and economies must grow to generate that wealth for the taxes, which then gets ploughed back into the system to benefit the people.
However, it's far more complex in the real world.
Some sliver linings can be small, such as the huge shifts to home working, which uses less fuel travelling to a place of work, less wear and tear on the car, lower insurance tiers, etc. It's offset a little by more power used at home while working. For some, that journey to work was stressful and made the work-day longer. For others, they miss the "water cooler" discussions with colleagues. For some, there are mental challenges, which I think we're yet to see more of as they find home-working and the exclusion of other humans a difficulty.
If anyone goes through each and every small aspect for each individual there are positives and negatives which are all interconnected, and, when added to the community and economy they add up. I've heard this before, and just for fun: "The optimist invents the aeroplane, the pessimist, the parachute."
It's easy for the glass-half-empty brigade to fall into the trap of more negativity, so if you are a glass-half-full-type-of-person, give others a helping hand, and your efforts will go up and outwards to others.
Change what you can, and don't get anxious about things you cannot change. Easy to say, of course, but it's worth trying.
This weekend i'm off to top up my glass-half-full with some more positivity of that special malt i've set aside, or to help our neighbour who's shielding because of medical challenges.