During this troubling time, there is a lot of government discussion for assistance in way of a government stimulus package. Which is great, this is most definitely a time for government involvement and assistance. There are some great thoughts and some concerning thoughts on the current plan being discussed.
First,
let’s identify the crucial items of concern for the people.
Food
Medical
Shelter/Household
In my opinion, in a catastrophic situation, those items fall under the responsibility of government assistance. Those are life-items, taking away the “worry” and provide relief for those items would be real assistance. So, the focus could remain on living, well-being, and following the guidelines needed to get on the other side of this challenging time.
I have my reservations about their idea of “sending money to Americans”. The majority of people will fall into the "send money" solution. However, it’s not that simple for a few reasons.
Helpful? Yes. However, it is a very temporary, "in the moment" band-aid.
Once you get cash in hand, you must be responsible to direct it properly as needed. If you blow it, then what?
It’s simply not enough. A one-time payment of $1000 (or even $2000), is not enough to blanket the current financial issues for any individual. It certainly will go further for some compared to others, but not even scratching the surface for almost anyone; regardless of your financial position. Keep in mind, this situation doesn’t discriminate against the wealthy, middle class or the poor. Income can stop, while bills remain, at all levels.
Will this be a low-interest loan for the people? No. Will it get paid back? No, not directly by the people receiving the checks. It will become absorbed debt, we'll all pay. Meaning the people who were not eligible for the assistance/check, will also be part of paying it back.
It will simply be a check people just get, cash and keep. Now, I'm also a huge fan of "send me money!", who isn't? But not without thought & responsibility. Not when I know it will create tremendous (additional absorbed) debt and future issues, and all for very short-term assistance. Real assistance needs to be able to help now while strengthening to recoup or rebuild. Just "giving" money to people barely even helps in the "now".
These free checks could total in the area of 500 billion (or more), and would not be responsibly paid back. So with ALL our debt we already have, where would this 500 billion go? Debt.
Also a possibility of concern; since it is going to be designated for people under a certain income level, this will create upset with some people. Who should get it?, Who shouldn't get it?, Why did they get it? etc... This will create upset as emotions continue to rise leaving a bunch of questions. Our infrastructure is not equipped or needs to handle a flood of additional upset during this time.
In my opinion, I would like to see government involvement & assistance that is sustainable, influencing growth, and benefits everyone. Not just a specific class. This is an “everyone” problem.
How do we develop a plan to assist “everyone”? Well again, in my opinion, I would like to see assistance along with the following mindset.
The main-frame of existence, the crucial items are:
Food, Medical, and Shelter(Household)
• FOOD
I believe the “cash payment” to Americans should go towards food only and break it down so it’s dispersed monthly and carries multiple months. Also, disperse it on a per person/per family rate.
• MEDICAL
I believe all premiums & co-pays should be waived, and the medical industry accepts insurance payments as-is, which is simply what the insurance will cover. Then, the government provides “bail-out” money (loan) for the short-comings due to this plan in that time-frame (remember, bailout money is not free, it is typically a low-interest loan, used by the industry to recoup loss and rebuild strength. Paid back by the industry).
If you do not have insurance, you receive insurance coverage during this time. The government designates an insurance company (I would imagine one of/or multiple heavy-hitters) to cover these individuals. Then the government will provide “bail-out” money for the short-comings due to this plan in that time-frame
• SHELTER/HOUSEHOLD
Although this comes in third on the list, this is super important. This WILL have a strong-hold on the economy, mental health, security, comfort, stress, anxiety, and worry. Real Estate IS a major-league player in the effect of our people and our economy. So how do we protect the people at such a HIGH cost across the country?
Here is how….
First, all property owners get their mortgage payments deferred.
These payments get added to the end of the loan term. It’s not unpaid, just moved (restructured).
In this time-frame of “no payments”, the government will provide assistance in way of “bail-out” money to cover those months, keeping the banking industry from getting hurt (which would negatively impact our economy).
Since this would be eligible for ALL property owners, landlords would be required to differ rent as well. So this will benefit Tenants also.
If you own the property loan-free. You will get property taxes differed and the ability to receive an additional tax benefit.
UTILITIES: ALL utility companies differ monthly payments. When the shut-down is over, the amount due gets spread over a specific term. “Sprinkled” on top of future monthly bills (the government provides “bail-out” money for the short-comings due to this plan in that time-frame).
A similar process to secondary bills like auto, insurances, mobile service, etc... Restructuring costs/debt vs. waiving responsibility.
You may have noticed, the “bail-out” money goes to the insurance companies, banks, utilities, etc... Known as “big corp”. NOT directly to the people... Why?
Because the money to these corporations is not “free”, it is paid back with interest. It does not sit as wondering/absorbed debt. ALSO, this “bail-out” money can be used to grow the business/industry which would provide fluidity & strength to the economy.
SAME THING WITH THE BANKS… Banks would pay the loan back with interest as well. However, they also lend that money out at a higher interest (that's their business), making money, growing business, pouring money into the economy.
Just “giving money” to the American people helps, however, is very temporary, and not nearly as effective as providing assistance through corporate responsibility.
It’s a matter of band-aid vs. reconstructive surgery. EVERYONE is smart enough to yell “you need a band-aid!”. Not everyone is smart enough to conduct reconstructive surgery.
Let's support a plan that allows the experts to reconstruct while providing relief to the people, which would allow and assist the "people" to reconstruct. So in the end, when the reconstructive surgery is complete, we are good as new and even better!
Stay healthy and safe!
_________________ Louis Ventre
New Jersey Broker/Realtor
Comments