The current economic situation is making business owners fear they won’t be able to make it to the start of spring. Sectors that rely on face to face interaction have been particularly impaired by so many rounds of shutdowns and this time might be the final round for many of them.
Right now, according to a brand new U.S. Chamber-MetLife poll, 62% of small-business owners are concerned with further impacts of the health crisis, saying they believe the worst moment of the crisis is still ahead of them. The same poll has also highlighted that most small business owners are in desperate need of federal assistance, with nearly 74% of the owners saying they need further aid to weather the fallout of the crisis. That figure rises to 81% for minority-owned businesses.
As we head towards a dark winter, a considerable amount of them can’t even afford rent. According to an Alignable rent survey, 35 percent of all small businesses in the U.S. couldn’t pay their rent this month, up 3% from 32% in November. When businesses don’t even find the means to pay rent and stay open, we can clearly understand that we have gotten to a point where there’s no way to argue that this is simply a recession. When over a third of all small businesses in the world’s richest country can’t make enough revenue to keep their doors open, that is called an “economic collapse”.
To give you further proof, let’s just spare a moment to examine what has been going on with federal tax receipts this year. In a recent note, former chief economist at Alliance Bernstein, Joseph Carson, has pointed out how weak tax receipts are sending a signal of economic distress. Carson outlines that now that we’re 9 months into the downturn triggered by the health crisis, federal gross withheld income tax receipts declined 13% from a year ago. The tax data records from the US Treasury suggest that the slump in tax receipts over the past 9 months is the biggest ever recorded. The only historical parallel we can compare to is the 14% fall witnessed in 2009 during the Great Financial Recession.
In other words, the level of economic wreckage is just unprecedented. And every day it passes at the University of Chicago informed that the U.S. poverty rate has considerably climbed over the last five months, with 7.8 million Americans falling into poverty. The economists maintain that such a high spike in poverty was driven by two main reasons: Millions of Americans cannot find jobs, and government assistance for the unemployed has abruptly dwindled since the summer.
However, even in households with adult workers who are still collecting paychecks, poverty is not out of the picture. In fact, a recent report has described how thousands of military officials and their families have been suffering from food insecurity. This spring, the base has seen a 40 percent increase in requests for groceries.
As opposed to civilian families who managed to collect federal benefits and qualified for food programs, considering military families are often provided with housing allowance, that leaves them ineligible to receive food assistance, a quirk in the law that Congress has repeatedly failed to address. Although military families are only a small part of the tens of millions of food-insecure Americans, hunger experts say most people have no idea that military servicers often rely on external help to have enough to eat.
Now, Congress remains deadlocked over the next bipartisan stimulus bill, and democrats are choleric that they are being forced to choose either enhanced unemployment benefits or $600 stimulus checks for our citizens. As there’s no sign of when a relief bill will be launched, our collapse is only intensifying and all the bubbles in our economy are already in the process of bursting. For those expecting a “return to normal” next year, we’re sorry to say that all evidences are pointing to a return to a much deeper recession. It appears that 2021 is going to be a really painful year.
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