If you’re reading this blog, congratulations on surviving 2020. We had a wonderful holiday with our daughter Abby home for nearly two weeks. A stay of that duration doesn’t happen without COVID, so there’s a personal silver lining.
Otherwise, the current state of the COVID pandemic is bleak heading into 2021. So much for the virus “disappearing” on November 4th following the election.
I’ve noticed the obituary section of our local newspaper now runs multiple pages when it used to fit onto one page. COVID is often listed as the cause of death.
I also read that in South Dakota some COVID patients on their death bed in an ICU unit are instructing the medical staff to not list COVID as the cause of death because of virus denial. Can stupidity be listed as a cause of death?
Sadly, the exciting vaccine news from last month has been tainted by the complete failure of the nationwide inoculation plan; the finger-pointing between federal and state politicians has begun.
I appreciate the checks and balances of federalism government, but when fighting a global pandemic war, you don’t let the good people of Ohio decide to which front line it sends its National Guard.
No matter your political leanings, the federal government has to play a major role in the nationwide inoculation program for it be expeditious - and that isn’t happening.
I’ll ask: Why was it proper to scurry a Navy ship to New York last March to provide a floating hospital for COVID patients, but now it’s not okay to now engage the military to help with mass inoculations?
The lack of a nationwide vaccination plan is forcing already overwhelmed hospitals to lead on administering inoculations. They are not staffed nor have the financial resources to do so and it is not going well.
While other countries are now attacking the virus with vigor, we’re still fighting a culture war about the efficacy of mask-wearing.
Do your loved ones a big favor by wearing a mask and get vaccinated as soon as you are eligible to help end this scourge. Trust me, you’re not a Communist if you do. I will definitely be in the vaccination queue when my turn comes.
Do any of you other political junkies remember the nasty political fight in 2009 about the size of the federal stimulus during the Great Financial Crisis? Obama has just taken office in January 2009 and immediately asked Congress to approve two-trillion dollars. Republicans, fresh off eight years of a spending orgy, were now playing fiscal hawks and offered several hundred billion dollars. After an acrimonious process, a historic $837 billion stimulus bill was passed into law in February 2009.
Like most of the legal sausage that passes in D.C., the 2009 stimulus bill was a hot mess. Remember Cash for Clunkers? A boat load of money was doled out as bailouts to political friends and to corporations in favored industries on both sides of the political aisle.
At the time, the 2009 stimulus bill was considered a staggering sum of money. Roll forward to the latest stimulus bill. The 2020 COVID Relief Act was another massive bill - $908 billion - but all these zeroes no longer shock the country’s conscience, especially after the $2.4 trillion of federal stimulus spending bill last spring.
Over the summer, Democrats were pushing for another three trillion (!) of stimulus money, but the negotiations stalled due to election politics. They eventually settled for last month’s stopgap spending bill and are now eagerly awaiting the new Biden administration to grab more.
Look, we need more stimulus, but this money is not free and certain stimulus spending is smarter than others. Borrowing money to hand every citizen $2,000 – or even $600 – doesn’t feel financially savvy for a country borrowing to pay the interest on the money that it had previously borrowed. It is similar to a credit card debtor borrowing from one card to make the monthly payment on another card, except their interest rate is 19%, not one percent.
Instead of cash transfer payments, how about a major new infrastructure jobs bill and direct financial assistance to the service industries hurt the most by the quarantine?
Here are some of the highlights of the December law, spread across 5,503 pages, that you may find interesting:
- New stimulus checks of $600 per individual and children under age 17; subject to a maximum income test;
- Extension of federal unemployment benefits of $300 per week for eleven weeks;
- Replenishment of the Paycheck Protection Program to lend more working capital money to private business;
- The employee retention tax credit was renewed and expanded;
- The 100% deduction for cash charitable gifts introduced in 2020 was extended to 2021;
- Married standard deduction tax filers can take a $600 charitable deduction for cash gifts;
- Unused Flexible Spending Account balances at 12/31/20 can now be used in 2021;
- Businesses can now deduct 100% of meals and entertainment expenses at restaurants;
- Medical expense itemized deduction limit was reduced from 10% to 7.5% of gross income;
- The Lifetime Learning Credit higher education tax break was expanded;
- Required minimum distributions from IRAs and retirement plans, suspended for 2020, are required again in 2021.
The new law fixed a major flaw in the 2020 CARES Act legislation regarding the PPP business loan program. Under the original law, a forgiven PPP loan to a business was not taxable income but the taxpayer could not take a tax deduction for the legitimate business expenses financed by the loan. Now, for 2020 and beyond, these expenses are tax deductible.
The new stimulus bill has some remarkable pork spending in it, but I guess that comes with the territory.
Overall, there are some useful provisions in the latest spending bill, but, with $30 trillion in federal debt and growing, with more spending coming, the US government will eventually be held accountable for these enormous deficits and debt by capital markets. When? I wish I knew.
Until next time, be safe and well….Tim