I’m less sanguine about the recovery. Many people have no cash reserve left and won’t find their jobs waiting for them when they are allowed to have their constitutional rights back temporarily (until dems invent a new crisis and demand them again, now that they know they can). So who’s going to fuel this big expansion?
agree
So who’s going to fuel this big expansion?
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I think you underestimate people’s cash reserves. We have had 9 weeks of shutdown. People received pay at the end of weeks 1&2. By week 6, people had increased unemployment compensation and $1200/per person stimulus $. Companies could continue to pay those not furloughed.
Everyone received the $1200 (or less if they made more income) and had nowhere to spend it. Most could not be evicted and could pay rent over time. Gas is cheap and there was nowhere to go. The market rebounded by week 7. Taxes are deferred to summer and fall. People can take loans from their IRAs with deferred, lowered interest, no penalty terms. Any retail store could and did sell at curbside by week 4 and some went online. Small manufacturers and farmers set up online sales portals, instituted delivery to curbside and set up drop off sites in larger cities. Grocery stores boomed. People opted for DIY rather than hire someone and that saved cash. Personally, we received a credit on our car insurance and on our Internet subscription (because they could not make a home service call). I shipped one average order a week before shutdown. The account was shut down for 4 weeks but my invoice was paid on time. I had one large order that shipped 4 weeks late, so that invoice will be paid a month later than planned. That account shut down for 4 weeks.
Real estate was back in business by weeks 3-4. Banks stayed open by appointment & drive thru. There were underground personal services and home service all the way thru. Cars were bought and sold.
You Tubers put out specialized content for Patreon members. Grants proliferated throughout the art community. Vets stayed open. Pet day care set up curbside arrival and delivery and stayed open. Online sales boomed, as did trucking. Essential factories ran 3 shifts 6 days/week & cancelled vacations.
Maybe 10% of the most marginal workers only saw the $1200 and that was likely more than they would have earned in a month.
That’s off the top and my personal knowledge. My bet is that cash is smoldering in bank accounts and waiting to be spent.
-——So who’s going to fuel this big expansion?-——
By my windshield survey just now, the expansion is presently underway.
The evidence is plain to see and is in the form of 18 wheelers on Interstate 81. Forbes declared I 81 to be the heaviest freight bearing interstate in the country. Today it is heavily traveled by normal or perhaps more trucks than usual.
The interstate travel is heavy although the various RV/trailers are totally absent.