17 Million Americans Behind on Mortgage or Rent Payments
Even as market mania continues over hopes for a coronavirus vaccine, the economic devastation caused by the government response to the pandemic continues to ravage the economy. Seventeen million households are behind on rent or mortgage payments, and nearly 6 million Americans say they are at risk of eviction in the next few months.
According to a survey by the US Census Bureau, roughly 5.8 million adults say they are somewhat to very likely to face eviction or foreclosure in the next two months.
A CARES Act program allowing homeowners to pause mortgage payments for up to a year is set to expire. Some homeowners in the program could face foreclosure as early as March. Meanwhile, the CDC’s nationwide suspension on evictions will expire on Dec. 31. Millions of Americans are also set to lose unemployment benefits at year-end unless Congress passes an extension.
The employment situation has also been deteriorating. Weekly unemployment claims set a record in March and have yet to fall below the previous record set during the Great Recession. Weekly jobless claims have risen each of the past three weeks.
And the employment picture doesn’t show any hope of improvement, with nearly 1-in-10 companies are planning layoffs in the next three months. That’s on top of the more than a quarter of US companies that have already let workers go in Q4.
There is also the looming prospect of more corporate bankruptcies and business closures, putting more pressure on the jobs market. More than 420,000 small businesses have closed their doors permanently since the beginning of the pandemic. That represents a staggering 7.1% of all small businesses. Brookings estimates that the US economy has lost some 4 million jobs in the small business sector “that will only return with the creation of new businesses.” On top of all this, Goldman Sachs projects even more permanent job losses coming down the pike as a wave of mergers, acquisitions and corporate takeovers sweeps through the economy.
This underscores the fact that despite optimism about a vaccine, nothing has fundamentally changed in the economy. And even if they cure COVID, it won’t instantaneously fix the economy. As Peter Schiff has put it, there is no vaccine for what ails the economy.
The US government will almost certainly pass a massive stimulus bill to prop up the economy a while longer. That means more debt and more Federal Reserve money printing. But as Peter has been saying, this so-called COVID cure is what’s making the economy sick.
The real burden is not the COVID, but all the debt the economy accumulated while the Fed was trying to fight COVID. It’s the COVID cure that is far more harmful to the economy than the disease. So, even after the disease is gone, the cure is going to linger and is going to continue to do damage because we accumulated all this extra debt, because the Fed’s balance sheet is now so much bigger, because the stock market bubble is so much bigger, because the real estate bubble has gained new strength, because everybody has more leverage than they did before. And of course, the US economy is going to be less efficient in this post-COVID world as US companies are still going to have to be covering the costs of being able to prepare for the next lockdown or the next virus that comes up. We already know what the playbook is.”