Democratic and Republican congressional leaders agree another stimulus package is needed, but the size is still “to be determined” for what will be the fifth piece of legislation to combat the economic impact of the COVID-19 pandemic. The CARES Act was the largest of the previous four bills, signed into law by President Donald Trump four months ago today (3/27/20). It provided $2.3 trillion of support to individuals, businesses and states. The size of bill number five will likely land somewhere between the $1 trillion Republicans prefer and the $3 trillion sought by Democrats. This week’s debate on the legislation will focus on the possible extension of the $600 per week of federally funded jobless benefits that expired just this last weekend (source: Congress).
As of the end of the first quarter 2020, there were 43.1 million households in the U.S. that were renters, representing 35% of 124.4 million households nationwide. A mid-July 2020 survey estimates that 23.6 million of the 43.1 million renters (55%) fear they have “no to slight” chance of being able to pay their rent in August. Without monetary assistance (more jobless benefits) or time (a longer moratorium on evictions), millions of lower income families could lose housing within weeks (source: Census Bureau).
California passed New York last week as the state with the most COVID-19 cases in the country, i.e., 445,400 vs. 411,200 as of Sunday 7/26/20 at noon ET. However, California’s mortality rate (2%) is a third of New York’s (6%), reporting 8,337 deaths to New York’s 25,103 total (source: The COVID Tracking Project).
Notable Numbers for the Week:
- LOW RATES – $1.2 trillion of corporate bonds were issued by “investment grade” companies in the first half of 2020, a record volume in U.S. history for top-rated firms during the January-to-June time period (source: Securities Industry and Financial Markets Association).
- THEY LOST THEIR HOME – Banks repossessed 527,906 single-family homes in the first half of 2010 during the global mortgage crisis that began in late 2008. A decade later, banks repossessed just 37,917 single-family homes during the first half of 2020 at the beginning of the COVID-19 pandemic (source: Attom Data Solutions).
- HOSPITALS – Between 3/01 /20 and 6/30/20, American hospitals lost $51 billion per month of revenue due to cancelled and foregone medical services (source: American Hospital Association).
- GOOD USE OF MONEY – Every $1 the IRS spends on “examinations and collections” results in $3 of increased tax revenue (source: Congressional Budget Office).
Mark R. Reimet, CFP®
CERTIFIED FINANCIAL PLANNER™