The Stimulus Is Finally Here

Congress finally passed a stimulus. We have been waiting for one since October. Most didn’t think anything would pass initially, but also it seemed improbable that people on unemployment would be left out to dry. What really pushed Congress in the direction towards getting a deal done was the weak November BLS report which was caused by the latest wave of COVID-19. 

Anyone who doesn’t live in a bubble knows people are hurting and it’s common sense that the data will get worse from November because the shutdowns are deepening. There has been a lot of pushback about giving people only $600 checks. That would have been amplified if nothing passed.

The Details Of The New Law

Stimulus checks are $600. They are going out to individuals who make less than $75,000 per year and couples who make less than $150,000. Dependents will be getting $600 as well which is actually $100 more than the first stimulus. The checks will shrink as people earn more money. People who make $100,000 per year or more won’t get anything. The hope is the checks can go out early next week. Therefore, we could see a boost in spending in December.

The timing is off because the money can’t be used for Christmas gifts. That being said, many people using the money will be buying basic necessities because they are experiencing financial hardships. These checks won’t save people, but unemployment benefits will help. Cynics will say these stimulus checks will go into story stocks. 

For gig workers, there will be a $100 boost in unemployment checks which is better than the $0 given last time. For everyone else, the benefits are $300 per week for 11 weeks, but they might not start immediately on December 27^th. States’ unemployment computer systems are terrible. 

Remember, in the spring when Florida had people waiting outside on long lines to apply for benefits which could have spread the virus further. Many state governments are living in the 20^th century. These benefits are about 85% of typical incomes (without the $300, it’s 50%).

PUA and PEUC benefits will also be extended to 11 weeks. The expiration of 14 million people on benefits would have been awful. That expiration was another catalyst for passing a stimulus. Yes, we need impending doom to get anything done in Washington.

Besides that, there will be $284 billion in PPP loans. The problem here seems to be actually getting small businesses the money as opposed to having it available. That transmission process hasn’t been fluid. Plus, there will be $82 billion in help for schools and $27 billion for transit. School employment has taken a hit as less workers are necessary for e-learning. The real solution here is to get kids back in classrooms permanently of course.

Then there will be $25 billion in rental money to avoid evictions. There will be $13 billion to help the hungry. There will be $10 billion for childcare and money for vaccine distribution. There is also legislation against surprise billing. The GOP’s liability shield and the Dem’s money for state and local governments weren’t in this bill. 

The GOP has been winning in both Georgia Senate races in the past 3 sets of polls. Some can’t see this race changing between now and January 5^th because the holidays will take up people’s attention in the next 2 weeks.

Each City Is Different

The federal government doesn’t set most COVID-19 policies. Each state has different regulations which is positive in the sense that each state has different levels of outbreaks. It’s also positive because we can see what works and what doesn’t. The negatives are that it’s tougher to coordinate upon a unified basic understanding of the best approach. Plus, there could be states that go rogue. These differences are shown in the chart below.

(Click on image to enlarge)

As you can see, Florida has seen its seated dining hardly fall from early in the fall, while New York, Pennsylvania, and Illinois are down over 80% from before the pandemic. NYC has banned indoor dining. It’s freezing outside, making it tough to eat at restaurants. It’s much easier to order food and stay in. 

There has been another wave of restaurants building outdoor facilities that are fairly close to being indoors. Either you think they are skirting the rules or that restaurants are being unfairly punished. It’s definitely a polarizing topic.

The Vaccine Count Has Started

It looks like hospitalizations could peak over the next couple of weeks now that cases stopped increasing. The holidays might change that, unfortunately. With that being said, help is in the way as you can see from the map below. Over 550,000 shots have been administered. 

We can expect that to ramp up enormously over the next couple of weeks. People need to get two shots, so we aren’t going to see an effect on the COVID-19 data immediately, but that could come in February. North Dakota and South Dakota have the highest percentage of doses per person probably because they aren’t big states.

(Click on image to enlarge)

We can’t forget about the fact that while almost every American who wants a vaccine will have one by the summer, that’s not the case for the rest of the world. America didn’t do a great job of containing the virus, but it has done a good job at securing the necessary vaccines. It should take until 2022 for the rest of the globe to have access to vaccines. That’s why the other vaccines will be important even though the ones that are already going out should be enough for America. 

At this point, if J&J was to release positive data on its vaccine, that would mostly help the rest of the world instead of America. The chart below shows how we can get to 85% of the world vaccinated by using the top 10 vaccines. Of course, there is a lot of uncertainty about the effectiveness of the unreleased ones.

(Click on image to enlarge)