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One of the things about the current crisis that is so fascinating is that a significant portion of mainstream America seems to think everything is going to be okay with regards to the economy.

Some act like the economy is just a light switch, and if we all just huddle up in our houses everything will be fine. We’ll just flip the switch back on in a year or two when we come out to play with one another again.

I’ve always enjoyed reminding people of uncomfortable truths, so this one is for the shutter-downers who thought we could just turn the light switch off on the economy.

Mortgage delinquencies in April shot up to 1.6 million delinquencies. This is the largest one month jump in history. That’s a long time. Total mortgage delinquencies are now 6.5% of all residential mortgages. Add to that 8.8% of mortgages that are in forbearance.

Want some historical perspective?

The April increase is 3x larger than any one month increase during the Great Financial Crisis (2008). It took 18 months to get to 1.6 million delinquencies during the GFC.

I repeat, we did that in one month…

One month!

If you add the forbearance number to the delinquency number you get 15.3% of all mortgages are not being paid. The peak of the GFC saw that number at 11.5%.

The current unemployment rate is 20.6% (9.7% in Missouri). If you look at the chart of the last five weeks you’ll see that we’re probably not done adding new unemployment numbers. It’s going to get worse.

The thing about the forbearance programs one should keep in mind is that they usually last 6 months. Survey after survey has shown somewhere around 50% of the US population doesn’t have enough savings for anywhere between 1-3 months.

So in 6 months a good portion of these people who didn’t save any money to begin with and might have lost a job are suddenly going to have to start making their mortgage payments again. I bet the economy just rips in October!

Wait, it gets worse…

Much of the data on small businesses has shown that around 50% of small businesses don’t have 2 months cash reserves. While many of you were flattening the curve, you also were flattening the savings of small business owners.

And worse…

The unemployment insurance that Congress passed in the CARES Act ends in July.

Here’s the most important thing you can understand about employment: You don’t have jobs if you don’t have cash flow. You don’t have cash flow if you keep Americans locked up in their homes or terrified to leave them.

No jobs, no savings, and no income means a whole bunch of people can’t pay for much of anything.

Economic gravity still exists, people that can’t make payments won’t. And if you think all the stimulus checks and unemployment is working right now, then ask yourself why do we still have 15% of mortgages not being paid with all that stimulus?

Good luck with your light switch, I’d tell you to call an electrician to fix it, but he or she probably lost their job while you were flattening the curve.

I grew up thinking the GOP had principles. The decay began in the 2000s. The 2010s saw those principles go to die.

I’ve been encouraged to see Rep. Justin Amash decide to leave the GOP and join the Libertarian Party. He’s not a hard core Libertarian by no means, but he’s Liberty oriented, and he has principles. He also recently declared his intent to run for President as a Libertarian.

Amash recently appeared on The Fifth Column podcast to explain his case for the spoiler.  If you’re one of the few Republicans left in this country with principles, listen to this discussion.

The GOP has rotted out and there’s not much left of it that’s worth even wasting your energy to defend.

Yeah, I know, most Democrats are totalitarian nightmares, but some things just need to be burned to the ground.

In 2020, if you’re facing an option like Rep. Sam Graves or Donald Trump, vote to primary, vote 3rd party, or just write in a name, but quit giving sanction to these people that don’t have any principles.

 

Muh, gubmint will save me!

One of the saddest things about the Coronavirus is that it’s really a picture of complete and utter failure by government agencies who have grown too large and lost site of their defined mission.

The CDC has a clearly defined mission that states it seeks to “prevent, detect, and rapidly respond to disease outbreaks at their source.”

Oops…

“Just two weeks after he’d tweeted that there was “no confirmed person-to-person spread” of the new coronavirus emerging from China, Centers for Disease Control Director Robert Redfield submitted to Congress a 512-page budget request asking for more than $7 billion in taxpayer money.”

Virus you say?

Meh… We’ve got research on gun crimes to do and people are dying from vaping out there! 🤦‍♂️

Read more over at Reason: https://reason.com/2020/05/15/as-covid-19-approached-cdc-asked-congress-for-more-money-to-fight-the-drug-war/