In February, our national unemployment rate was just 3.5 percent. By March, it had jumped to 4.4 percent. The first week of April added another 6.6 million to the ranks of the unemployed. Over the past three weeks, there have been 16.8 million unemployment claims. Ohio’s share of that is almost 700,000 claims. Dispatch Article. Put another way, that’s the combined population of both Cleveland and Cincinnati, now unemployed. The NY Times is reporting the national unemployment rate to be closer to 13 percent. Article here.
At the end of March there were a number of legislative measures pushed through Congress to provide safety nets to the American people and stimulus to the economy. There is no question the Federal Government had to do this; however, continued focus on the economy and stimulus is putting the cart before the horse. Let’s put the effort into beating the virus.
Initial Safety Nets:
Families First Coronavirus Response Act
The first safety net is the Families First Coronavirus Response Act or the FFCRA for short. This act requires employers of 500 or fewer people to provide two weeks of paid time off to employees who miss work due to the Coronavirus. This includes missing work due to the need to provide childcare. For more information on the FFCRA, the Department of Labor has a really good summary here. Employers are reimbursed at year end in the form of refundable tax credits.
$2T Stimulus
The second was what is commonly referred to as the Coronavirus Stimulus. While we have seen stimulus bills in the past to stimulate the economy, never anything this big. This package is two trillion dollars ($2,000,000,000,000.00). Think about that a minute.
The stimulus does a lot:
- There is a direct payment to qualifying taxpayers;
- Unemployment is extended;
- Through July 31st, the federal government is increasing unemployment an additional $600 per week from the state awarded payment;
- Most federal student loans are put into forbearance;
- Minimum distributions from IRA’s have been suspended for 2020;
- An early withdraw from an IRA will not have the 10% penalty, provided the withdraw is due to the Coronavirus;
- The amount you can borrow from a 401k has been doubled;
- A national moratorium was put in place on evictions for landlords whose loans are backed by Freddie Mac or Fannie Mae; and
- $370 Billion was set aside for loans to small businesses, some of which are forgivable.
For a more detailed discussion/FAQ on what is in the stimulus bill, the NY Times put together a really good article here.
What’s the Problem?
You can bailout the economy all you want, but until we beat the virus, we can’t restart the economy!
What we really need is a vaccine. Something that can create an immune response to create antibodies that kill COVID-19, the medical condition that is caused by the Coronavirus. While there are a number of pharmaceuticals and bio-tech firms racing through clinical trials, reports say we are, at best, a year away from a vaccine that can be used on the public. Article.
So when do we restart the economy?
No one knows for sure, but experts are beginning to layout some measures to determine when trying to slowly restart the economy should begin. The four that have been identified by experts so far are:
- Hospitals must be able to treat all patients requiring hospitalization without resorting to crisis standards of care.
- Authorities must be able to test everyone who has symptoms and get reliable results quickly.
- Agencies must be able to monitor confirmed cases, trace contacts of the infected, and have at-risk people go to quarantine.
- Sustained reduction in cases for at least 14-days.
Ohio has cleared hurdle one, so far. The current load of patients being seen for COVID-19 is not overwhelming the health care system. The last three, however, Ohio is failing.
The United States still hasn’t devised and distributed an effective testing procedure that delivers quick results. There is currently a shortage of testing kits and the pieces that make up the kits. Ohio State has been at work to try to shore up two of the shortages — the swab itself and the solution used during transport. Ohio State’s swabs, created on 3d printers, and their in-house transport media were recently approved by the FDA. Source. So we’re not there yet, but it seems like we’ve got people working on it.
What are other countries doing?
In the absence of a vaccine, other countries that have attempted to restart their economies have had significant tools for tracing infected. This includes having people have their smartphones scanned to determine where they’ve been, and forcing people to use apps to monitor their health. Culturally, I just do not see Americans getting on-board with what will feel like a government invasion of privacy.
In Wuhan, the city where the virus started, life is just now starting to get back to normal after a two and a half month quarantine. As Wuhan is adjusting to its new normal, there are reports that it will be constructing COVID-19 sections to the hospital to help contain the virus and keep it from spreading to other patients. It is expected that occupants of the city will continue to wear masks for another three and a half months. AP.
Dr. Amy Acton has already indicated that she wants to see a drop in cases for about 14 days straight to know the virus is really on the decline. Dispatch. As the number of cases and number of deaths increased yet again today, we are no closer to beginning the countdown to getting back to work.
In the meantime, stay home. If you leave, mask up. Wash hands frequently.
