• Sery Kim

My newest op-ed: "Coronavirus Congress: Bailing out Big Business vs. Helping Average Americans"

As of March 21, 280 Americans[Office1]  have died as a result of coronavirus.  Putting these deaths in perspective with other health care morbidity numbers – 609,640 cancer deaths [Office2] , 83,564 diabetes deaths[Office3]  , and 59,000 flu deaths [Office4]  – no longer has any effect since Americans have gone far beyond the tipping point of evaluating cold, hard facts to fear-based behavior and purchasing (diarrhea, aka the need for so much toilet paper, is not a side-effect of having coronavirus). Since we are beyond reason and now looking at solutions to get back to normalcy, two questions reverberate: (1) how long will the economic recovery take and (2) how can politicians in Washington, D.C. come up with common-sense solutions to immediately help hurting Americans. As for question one, the economic recovery, who can say with certainty how long the recovery will take?  Each hour brings differing news.  In the evening, governors mandate citizens stay at home for indefinite periods of time.  In the morning, businesses gesticulate widely from the stupidly calloused – businessmen like Danny Myer, who owns Shake Shack and is worth approximately $400 million, firing 2,000 employees after a week (he could have paid each of them $10,000 and still had $380 million left in the bank!) – to stupendously generous.  Incredibly, Walmart decided to give their hourly employees $300 bonuses, gave Q1 bonuses early, and announced a plan to hire 150,000 employees.  No one knows what the economic future holds but generally I think Goldman Sachs is right and we will see -24% GDP. Which leads us to question two.  If we don’t know what the economic recovery will look like, we need Washington, D.C. to come up with common sense solutions.  Yet right now we are seeing from Washington, D.C. the same type of bailing out big business behavior we saw in the 2008 Great Recession when banks and mortgage companies got bailed out while the average American went bankrupt. D.C.’S current coronavirus, $1.3-$1.8 trillion-dollar plan has airlines receiving approximately $60 billion dollars; $200-$500 billion to undefined “hard-hit industries,” aka a coronavirus slush fund; with $300-$350 billion in guaranteed loans to small businesses.  The average American will get approximately $1,200 with $2,400 if you have a family – this assumes you have taxable income because the amount you get will depend upon that. Yet again, these Washington, D.C. driven economic “solutions” to coronavirus show a tin ear to the fact Americans today are fearful not just because they might lose their jobs but because they don’t have money to pay rent, utilities like electric and cable, as well as groceries.  The bill before Congress today doesn’t do anything to get Americans the money they need to pay their bills for two simple reasons. First, the average American lives paycheck-to-paycheck.  According to Forbes, 78% of Americans live paycheck-to-paycheck[Office5] .  Careerbuilder broke that scary statistic down even further: (1) 1 in 10 workers making more than $100,000 a month still live paycheck-to-paycheck; (2) more than 50% of all minimum wage workers have to work more than one job a month to make ends meet; and (3) only 1 in 4 Americans save money.  What D.C. doesn’t get with their $1.3 trillion dollar bill is, with entire states shuttered and fear keeping consumers from purchasing everything except toilet paper, the real impact of coronavirus will be 78% of Americans will not be able to pay their April rent/mortgage or have electricity and water.  Nothing in the language of the bill gets 78% of Americans their April rent or pays their electric bill.  Worse still, according to the U.S. government, the leisure and hospitality dwarf all other industries for minimum wage workers – almost 1.5 million compared to the next biggest industry which is wholesale and retail trade at 149,000[Office6] .  Thus, with restaurants and hotels shuttered, it means restaurant workers and hotel workers will not just bear the brunt of coronavirus’ economic downfall … THEY ARE THE ENTIRE DOWNFALL.  Yet again, the current bill doesn’t offer leisure and hospitality workers guaranteed jobs in other sectors nor does it offer them re-training to obtain the skills they need to get another job. Second, even if the U.S. government could get money to Americans in less than two weeks, Washington, D.C. cannot hand out this money without massive amounts of waste, fraud and abuse.  According to[Office7] , the U.S. government run website which tracks improper payments by the U.S. government, in Fiscal Year 2019, the U.S. government wasted or “lost” to fraud and abuse upwards of 25% of all payments they make.  So if Congress decides to shove out $1.3 trillion for coronavirus relief, you might as well have the U.S. government pile about $250-$300 billion in front of the steps of the U.S. Capitol and light it on fire.  It has the same effect. You can check for yourself because is a great website if, for no other reason, then it has master spreadsheets from 2015, 2016, 2017, 2018 and 2019 listing every federal program’s payment, how much they paid out, how much of the payment was fraud, as well as the effective waste, fraud and abuse in government rate is.  For instance, unemployment insurance in 2019 paid out $32,524.19 million ($32 billion), had an improper payment rate of $3,788.09 ($4 billion), with a 11.65% rate of waste, fraud and abuse ($466 million). So if the average American can’t pay their bills on April 1 and the federal government can’t seem to administer a program without waste, fraud and abuse, what is the real solution?  Simple.  Have landlords, utility companies, cable companies and phone companies waive payments for 60 days with these companies then sending invoices back to the U.S. Treasury for payment. Excuse me, “What?!” Think about it.  On Friday, March 20, President Trump ordered Fannie and Freddie to pause mortgage payments for up to a year[Office8] .  Even before that President Trump paused student loan re-payments for 60 days.  Why could he do that?  Because the U.S. government is a lendor. But the U.S. government is also a regulator, and there are no more heavily regulated industries than housing, utilities and cable.  For instance, Billingsley is my landlord and they have all my employment information, as well as my social security number, along with a slew of other information requested as regulated by federal, state and local government, as well as the legal system (e.g. race, gender, nationality, etc.).  Billingsley is also a billion-dollar company.  How easy would it be for them to go into their invoice system, generate a list of all people living in their apartment buildings, the amount of rent paid by each and then send to the U.S. Department of Housing and Urban Development a two month bill for $20 million?  Same for my utility provider Reliant.  Or to my cell phone company AT&T.  Have you ever seen all those ticky-tacky taxes on your electric and cell phone bill?  Regulated! Besides, think about it even more rationally.  Even if the average American was to go along with the current $1.3 trillion Senate plan, how would the U.S. government find every American who needs $1,200 or $2,400 anyway?  The bill will likely use IRS information but, according to the IRS, the U.S. government failed to collect $380 billion each year between 2011 – 2013 à and for the period between 2020 and 2029 will fail to collect $7.5 trillion [Office9] (that’s “t” like TRILLION).  If the U.S. government can’t collect the money it is owed how will it do in giving away money it’s not owed?! Alternatively, what if the bill uses the U.S. Census Bureau mailing addresses?  According to the U.S. Census Bureau, they are already $200 million (the sad “m” in government appropriations world) in budget deficit in implementing the 2020 Census so they could hardly have the manpower to shove out that much money. No.  The solution lies in common sense.  Suspend rent, utility and phone payments and have these heavily regulated companies invoice the government for it.  The American taxpayer could even demand these companies be paid back by hiring all unemployed Americans due to coronavirus become tax collectors with them earning a percentage of all money they retrieve (like real collection agents).  Either way, whatever the path forward is, know the government can’t act fast enough or give out money smart enough to help the average American.  And that should be the saddest and scariest state of them all right now.

[Office1] [Office2] [Office3] [Office4] [Office5] [Office6] [Office7] [Office8] [Office9]


© 2019 by Sery Kim.