There\u2019s an old athletic expression: \u201cYou can pay me now, or you can pay me later\u201d. It simply means, either you put in the work to be \u201cgood\u201d now, or you will pay the ultimate price in failure or injury later. But that also applies to our Nation. We dodged a huge economic bullet in the year of the worst pandemic crisis: March 2020 to May of 2021. Unemployment in the fall of 2020 was approaching 15%. In many job categories, unemployment was much higher. Before the pandemic struck, the rate was under 5%. <\/p>\n\n\n\n
That meant that many millions of Americans, through no fault of their own, were out of work. They wouldn\u2019t get a paycheck; for rent or mortgage, for food, for dental care for the kids. And most Americans, like it or not, didn\u2019t (and don\u2019t) have the \u201cfour months\u201d emergency fund that all of the personal finance \u201cgurus\u201d say should be in the bank.<\/p>\n\n\n\n
In fact, there were even worries about the banks. What if\u2026everyone wanted whatever cash they had at the same time? We faced shortages in meat, toilet paper, and all sorts of seemingly random items. What if the banks too, were short of cash, short of the money many desperately needed to keep life going?<\/p>\n\n\n\n
We faced a good old fashioned economic depression, one almost as big as the Great Depression. The stock market lost almost half its value, and while prices for some goods fell (gas prices for example) the issue wasn\u2019t the price, it was in getting money to buy those goods in the first place.<\/p>\n\n\n\n
But we learned a lesson from the Great Depression.\u00a0\u00a0The Government CAN take actions to shore up the economy, particularly in an economic crisis created by a non-economic disaster.\u00a0\u00a0This wasn\u2019t caused by a \u201cBlack Friday\u201d on the stock exchange, nor a real estate or dot-com \u201cbubble\u201d.\u00a0\u00a0It wasn\u2019t even stock market high-jinks like the crash of 2008.\u00a0\u00a0\u00a0This was a massive unemployment event, caused by a pandemic.<\/p>\n\n\n\n
So the Government intervened.\u00a0\u00a0Trillions of dollars were spent, shoring up personal incomes.\u00a0\u00a0Unemployment checks were boosted and extended, and most taxpayers were given direct aid, a $2000 \u201cboost\u201d, to help tide them through the crisis.\u00a0\u00a0It wasn\u2019t a \u201cRepublican\u201d or \u201cDemocrat\u201d thing (though President Trump\u2019s signature was prominent on the letter attached to the check), it was a whole Government thing.\u00a0 And\u00a0it was the right economic move to make.\u00a0\u00a0<\/p>\n\n\n\n
In the worst days of the pandemic, there was lots to worry about. Thousands of Americans, mostly the old and the vulnerable, were dying of Covid. Many more were getting sick with a disease that had unknown short and long term consequences. And we still don\u2019t know what the health fallout from Covid will ultimately be. But there weren\u2019t bread lines, there weren\u2019t runs on the banks, the stock market gradually recovered, and we muddled through the pandemic.<\/p>\n\n\n\n
It wasn\u2019t all pretty:\u00a0\u00a0wear a mask or not, kids at home or at school, old friends disappeared, buried without fanfare or funeral.\u00a0\u00a0But we managed to make it.\u00a0\u00a0While we still haven\u2019t mastered Covid, we\u2019ve found a way to co-exist with it.\u00a0\u00a0Now it’s shots versus variants, testing versus blithe ignorance, and what has become a steady death toll.\u00a0\u00a0Still some 300 plus Americans still die of Covid, daily.\u00a0\u00a0It\u2019s just \u201cwhat it is\u201d.\u00a0\u00a0<\/p>\n\n\n\n
\u201cPay me now, or pay me later\u201d. The US Government pumped trillions of dollars into the economy, to try to stave off the looming Covid \u201cdepression\u201d. And it worked. But economics is a game of balance. It\u2019s all about paper.<\/p>\n\n\n\n
Paper money is worth exactly what it can buy.\u00a0\u00a0There\u2019s no intrinsic value to the paper itself, just rags and ink really with some high-tech gismos to try to prevent forgeries.\u00a0\u00a0As we discovered in the pandemic, the value of goods, say toilet paper, is simply based on what people are willing to pay for it.\u00a0\u00a0If there\u2019s a scarcity of toilet paper, then the remaining amounts are worth more.\u00a0\u00a0Why \u2013 because people want it, and they are willing to spend more for it.\u00a0\u00a0They wanted it so badly they literally fought for it in the aisles of Krogers.<\/p>\n\n\n\n
And if people have more to spend, they will buy more goods.\u00a0\u00a0So if there is a greater supply of paper money in the nation, than ultimately people are going to \u201ccompete\u201d for goods, by being spending more for them.\u00a0\u00a0And the US Government, under both Republicans and Democrats and for good reason, put a lot of paper money in the economy in the past two years.\u00a0\u00a0So, it stands to reason that the value of that money would go down.\u00a0\u00a0<\/p>\n\n\n\n
This is the \u201cpay me later\u201d of the Covid relief bills. <\/p>\n\n\n\n
So gas prices are at over five dollars. And I paid $20 dollars for twelve rolls of paper towels (of course, if you read the packaging, 12 rolls equals 20 rolls, and the Brooklyn Bridge is for sale). And I just noticed that not only did a Three Musketeers bar cost more, but it\u2019s smaller than it was before. So what\u2019s going on?<\/p>\n\n\n\n
We\u2019ve all got more money. Wages are going up. Even the State Teacher Retirement System, as tight-wad a program as ever invented, granted a one-time cost of living increase. And we all spent our Covid \u201cgovernment bonus\u201d. <\/p>\n\n\n\n
Sure the oil companies are making \u201cbank\u201d on the gas prices. The shipping companies are more than doubling their profits as they stack cargo up at the ports. There are all sorts of ways individuals and companies are finding ways to \u201cprofit\u201d from the current inflation. But at the core of the problem isn\u2019t \u201cDemocratic Socialism\u201d or \u201cRepublican Incompetence\u201d. It\u2019s simple: we dodged an economic depression caused by Covid. We did it by pumping money into the economy. Now we have to pay the price.<\/p>\n\n\n\n
Now, it’s later.<\/p>\n","protected":false},"excerpt":{"rendered":"