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U.S. Labor Department allows unemployment benefits for coronavirus

reuters.com

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Re: U.S. Labor Department allows unemployment benefits for coronavirus

#21

Post by rlt »

surge wrote: post #11
dsr_ wrote: post #8

Earlier quoted context omitted.

Ahem. Social security is not self-funded, it's funded by current payroll tax receipts, plus a 2.6 trillion trust fund, plus about 5 trillion in debt owed to it by the rest of the government.

Right, SS is already in a risky position, most millenials question if it'll even be standing when it comes to their turn (especially if population drops since they're having less children who will pay in), what they're suggesting would make it worse.

Well... it's a morbid thought, but if COVID-19 kills a large number of old people quickly, maybe SS will work itself out (FWIW it was my elderly dad who pointed this out to me)

Related: according to Twitter, kids are starting to call COVID-19 the "boomer remover" https://twitter.com/BaileyCarlin/status/1238147875143647234

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#22

Post by dgacmu »

QuesnayJr wrote: post #7
thrill wrote: post #4

Earlier quoted context omitted.

If we can afford a $1.5 trillion injection into the markets, then we can afford moving the SS retirement age to 60 where the most vulnerable exist.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

It costs, just not the face value. From a government revenue perspective, it's going at around half a point lower than before, which costs about $20m/day.

(There are a lot of different ways to look at the effect of that money injection, but this is one way to try to simplify it into a cost measure that doesn't require thinking about the effects on the economy)

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#23

Post by gbear605 »

claudeganon wrote: post #16
QuesnayJr wrote: post #7

Earlier quoted context omitted.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Yes, just like how poor people can get 1.5 trillion in subsidized payday loans to cover the gap between pay checks...oh wait. It’s absolutely a bailout.

It’s a bailout that doesn’t cost the government any money and that is guaranteed to be returned. Unfortunately, poor people aren’t a guaranteed return or the government would give subsidized payday loans. That said, the whole system needs to be changed to make it so that no one is in a situation to need a payday loan.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#24

Post by kurthr »

QuesnayJr wrote: post #7
thrill wrote: post #4

Earlier quoted context omitted.

If we can afford a $1.5 trillion injection into the markets, then we can afford moving the SS retirement age to 60 where the most vulnerable exist.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Well, they are presumably generating some 10s of basis points of profit (lack of loss) for the banking party, so it's more like putting a $B out there for the taking, but providing a lot more "liquidity".

That's the really disturbing thing... the bond market hasn't been liquid this week! Lots of no-bid.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#26

Post by [deleted] »

OscarCunningham wrote: post #14
thrill wrote: post #4

Earlier quoted context omitted.

If we can afford a $1.5 trillion injection into the markets, then we can afford moving the SS retirement age to 60 where the most vulnerable exist.

The money being "injected into the market" is in exchange for assets. They're not just giving it away.

[deleted]

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#27

Post by malandrew »

ajross wrote: post #9
larrywright wrote: post #5

Earlier quoted context omitted.

Social security is based on what you paid in, so the earlier you start withdrawing the lower your monthly check is. You couldn’t allow people to receive the full amount starting at 60 without bankrupting the program.

You say that as if liquidity management in a crisis wasn't a thing. Why, exactly, should free temporary cash be available to investment banks but not entitlement programs?

Banks have assets to offer as collateral for those loans. What assets do entitlement programs have to offer as collateral?

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#28

Post by ohithereyou »

If COVID-19 digs in deep in the US then there is going to be a transformational change in how US citizens think about work, travel, entertainment, security, and the relationship between US citizens and their government. All of these aspects are intertwined:

Work: More people will work more time from home and many firms will switch to virtually full time remote with limited physical gathering. This will decrease the cost of office rents and alter the work/life balance. It will affect wages because people can live outside of city centers and still work so companies will pay less. We may be on the cusp of US government guaranteed sick leave.

Travel: People will, for the short term, do less travel for pleasure, but the big impact, long term, business trips will decrease. More and more business meetings will be replaced with voice and video conferencing. There was no big driver other than some cost reduction here, but now safety and security will be the big drivers here. Global pandemic concerns (prevention, containment) will complicate travel to varying degrees, and in a way that most US citizens aren't used to - it will affect interstate travel, not just trans-national travel.

Entertainment: Many of the sports that have been deferred or canceled will likely be replaced with other forms of entertainment that can be viewed on television or the Internet. Fewer people will go to live performances, both because they can't (cancelled by the government) and reluctant to after COVID clears. This will affect service workers - where most of the lesser skilled jobs have been created in the last three decades.

Security: Security will no longer be seen as just a physical access control concern. Business has been preparing over the last two decades for the eventuality of global pandemic - now they can put those plans into action, and the impacts of them will cascade into personal lives. US citizens will be demanding more from their government in disaster preparedness on pandemics - it will affect travel.

All of these tie into how US citizens see their relationship with their government, and what they demand from it.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#29

Post by vkou »

malandrew wrote: post #27
ajross wrote: post #9

Earlier quoted context omitted.

You say that as if liquidity management in a crisis wasn't a thing. Why, exactly, should free temporary cash be available to investment banks but not entitlement programs?

Banks have assets to offer as collateral for those loans. What assets do entitlement programs have to offer as collateral?

The social contract not falling apart. Most people stand to lose quite a bit if it does.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#30

Post by ajross »

surge wrote: post #13
ajross wrote: post #9

Earlier quoted context omitted.

You say that as if liquidity management in a crisis wasn't a thing. Why, exactly, should free temporary cash be available to investment banks but not entitlement programs?

As mentioned in another comment, its a loan, not free cash. Investment banks will have to pay it back afterwards.

Why can't social security pay back a loan? It has revenue, it requires management and accounting for its assets anyway. We take loans from the trust fund constantly!

There's absolutely no reason this can't be done.

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