Stimulus Checks, Pandemics, and Bubble Economies

A lot of the things I write come at the wrong time. I don’t plan for my stuff to connect with the news, congressional cycles, or pop culture. Most of the time, I just see a Tweet or a Facebook comment and get going, so it’s a nice change of pace, when I can do something topical. In a day or so, Congress is going to drop their next stimulus package. The battle over specifics is raging, but the American have been unanimously clamoring for it and it’s an election year, so it’s coming down the pipe. Like most stimulus packages, it will do very little to “fix” the economy, but it will appease the masses for a few months. Virtually no systemic change will be made to fix the bubble economy and life will continue to stagnate. 

At this point, you may be asking: if we shouldn’t do stimulus checks, how are we going to keep the economy on track? Well, unfortunately the answer is not that simple, and most American’s don’t have the time to delve into the actual problem. The question shouldn’t be whether or not a stimulus check is necessary. We need to be asking why a stimulus check is necessary. 

There isn’t much debating that a stimulus check is needed, if we don’t want another recession on our hands. Businesses are taking a big hit during the pandemic, and people are not comfortable with spending money. You can’t blame them, we should all be holding onto as much money as we can. Nevertheless, if the middle class isn’t spending, then we have no economy. But why? How did it get to this? After a few weeks, people were defaulting on loans and missing rent payments. What happened to all of our money? Far be it for me to claim to be an economist. My understanding of the economy is surface level at best, which these days is more than most of the population, but that’s an issue for another time. What I lack in economic knowledge, I make up for in the ability to perform addition and common sense. So, why do we need a stimulus package? The simple common sense answer is that average American’s don’t have any money. 

You’d be surprised at how many people don’t come to that conclusion. Instead of going towards the obvious, many of us so often try to appear intelligent by spewing, what amounts to, academic jiberish. They’ll blame corporations and employers, lack of a minimum wage increase, and sometimes unions. The simple truth is that even American’s with a good employer and a high salary are still finding themselves strapped for cash. Across all different income levels, we’re all having a tough time. People are losing their jobs causing them to miss their bills. For a minimum wage worker, this isn’t a surprise; however, upper middle class earners, making $60-$80K, who have become unemployed, are missing their bills. They don’t have any emergency savings. Apparently, no one does. Millions of middle class Americans are living paycheck to paycheck, and it shouldn’t be that way. 

I have a personal rule that I’m going to share here. If an individual has a problem, the cause and solution to the problem is on the individual. If the problem exists over all different levels of society, then it is a societal problem. In the situation of every individual without savings, it is that individual’s fault for not having money saved for emergencies. Pandemics are a freak thing, but losing a job is not. It happens all the time, and is something everybody needs to prepare for. Going forward, we all need to learn to live below our means to prepare for the worst; however, the solution doesn’t stop there. As a society, we need to address the reasons why our economy crumbles at the first sign of weakness. 

We need to understand and correct the societal structures and cultures that have created an economy with essentially no ability to take hits and adapt. For starters, people take on a lot of debt these days. It’s pretty difficult to save money when a significant chunk of your income goes towards paying off your education, or a mortgage you can’t afford, and lets not forget the biggest bill of them all: income tax. On an individual level, with the exception of income tax, the individual who made the choices to take out that debt is responsible for the consequences. On a societal level, we need to figure out why it’s so easy to take on debt. Could it be that we have been keeping interest rates unnaturally low to encourage borrowing? Is it possible that the unnatural borrowing has inflated the price of housing and education? College is too expensive, housing is too expensive, and groceries and simple goods are inflated. That’s not an individual problem. 

Make no mistake, the economy was not in good shape before the pandemic. The economy hasn’t been in good shape for decades. The pandemic was just the pin that popped the bubble. If coronavirus never happened, something else would have come along a few months down the road to do the same thing. We’ve been inflating our economy with debt and government spending, but have never taken a moment to consider the consequences or the real cause. Our government hasn’t addressed real solutions, because real solutions aren’t always pleasant and cause politicians to lose their office. Our “leaders” weren’t brave enough to tell us the truth, and manipulated us into buying things we couldn’t afford to keep their jobs safe.

Michael A. Romano

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