Another 6.6 million new jobless claims means almost 17 million Americans have filed for unemployment in the last three weeks, and there's no indication this pace is slowing at all.
Jobless rolls continued to swell due to the coronavirus shutdown, with 6.6 million Americans filing first-time unemployment claims in the week ended April 4, the Labor Department reported Thursday.
That brings the total over the past three weeks to more than 16 million.
The most recent number represents a decline of 261,000 from a week ago, which was revised up by 219,000 to nearly 6.9 million.
The ongoing surge in filings for unemployment insurance has been exacerbated by the expansion of those who can file claim. The CARES Act has expanded the group to include the self-employed and independent contractors.
Prior to the social distancing efforts used to combat the coronavirus spread, the jobs market had been strong. In the six-month period prior to a shutdown that has taken offline much of the U.S. economy’s capacity, nonfarm payroll growth had averaged 221,000 a month.
However, March saw a decline of 701,000 that only began to measure how deeply the virus had impacted the employment situation.
Jerome Powell and the Federal Reserve have finally stepped in with the $2.2 trillion "Main Street" lending program created by the CARES bill for local government and business loans to help keep cities and towns functioning.
The Federal Reserve on Thursday released long-awaited details regarding its Main Street business lending program and several other initiatives it is undertaking to backstop the reeling U.S. economy.
Under provisions outlined for the first time, the loans would be geared toward businesses with up to 10,000 employees and less than $2.5 billion in revenues for 2019. Principal and interest payments will be deferred for a year.
The Fed said the programs would total up to $2.3 trillion and include the Payroll Protection Program and other measures aimed at getting money to small businesses and bolstering municipal finances with a $500 billion lending program.
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” Fed Chair Jerome Powell said in a statement. “The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The Main Street loans would be a minimum of $1 million and a maximum of either $25 million or an amount that “when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization,” whatever is less, according to a Fed release.
The Fed will purchase up to $600 billion in loans.
Terms would see an interest rate equal to the Fed’s Secure Overnight Financing Rate, currently 0.01%, plus 250-400 basis points with a four-year maturity.
This includes the Payroll Protection Program loans to keep employees paid through the pandemic, but considering we've already seen 16 million people file for unemployment, who knows where actual job losses are. It's a mess and coming up on Easter weekend means more delays in getting this money out.
We could see that 16 million double by the end of the month. Social distancing measures are going to require months, and right now this government is nowhere near being able to handle months of five or six million new jobless claims per week.
We need a US Marshall Plan on New Deal steroids, and we needed it 30 days ago. America's current for-profit model of basic necessities -- food, shelter, water, power, internet, health care -- is done. It won't survive another six weeks.
I don't know what will replace it. But if the Trump regime has its way, it'll be the ultimate in Laffer Curve idiocy.
Republican economist Art Laffer, an architect of the Reagan era tax cuts that paved the way for historic budget deficits in the United States, has a plan to rejuvenate today’s pandemic-crippled economy.
Tax non-profits. Cut the pay of public officials and professors. Give businesses and workers who manage to hold on to their jobs a payroll tax holiday to the end of the year.
What about the extra aid funneled to newly jobless workers by the $2.3 trillion fiscal rescue package? Such government spending, Laffer told Reuters in an interview, will only serve to deepen the downturn and slow the recovery.
“If you tax people who work and you pay people who don’t work, you will get less people working,” Laffer said. “If you make it more unattractive to be unemployed, then there’s an incentive to go look for another job faster.”
Laffer’s unconventional plan isn’t just an academic exercise. First of all, he says he has presented it to his contacts at the White House. They include presidential economic advisor Larry Kudlow, who considers Laffer a mentor.
Laffer is also being floated in influential right-wing circles as a good candidate to head a proposed new industry task force aimed at re-opening the U.S. economy as soon as possible. “Bring in the minds like Art Laffer,” Sean Hannity, the Fox News host said April 6 of the proposed task force.
Trump tweeted his support for the new economic task force on April 4, calling it a “good idea.” He hasn’t yet mentioned Laffer, but on Tuesday reiterated his support for a payroll tax cut, saying it would be a “fantastic time” to deliver it.
Trump awarded Laffer the Presidential Medal of Freedom last year.
Every one of these ideas Laffer has is designed to destroy Medicare, Medicaid, and Social Security for good by starving it out and forcing Americans to work until they die.
Which, if this keeps up, will be much sooner rather than later.
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