when things get tough and there is scarcity, people save more and spend less. as far as the unemployment benefits go, i think most people will still be very reluctant to spend on anything other than staples until they have a sustainable way of generating income that isn't dependant on a government program.
many of today's workers remember the duration of the unemployment benefits offered during the great recession -- and they remember for how many years economic conditions were difficult long after those benefits ended, even including the extension programs. everyone sees that there is a substantial chance of an extended and deep COVID depression which might dwarf the great depression and will certainly dwarf the great recession. you're not going to convince people to spend money in that environment.
plus, most of the things people would usually spend on are either explicitly off-limits or unlikely to be purchased in the current situation.
It's only enough if you stop paying your mortgage/rent and utilities. It's certainly not enough for most people if they still have those expenses on top of everything else.
Though, admittedly, lots of people are getting substantially more than that -- a married couple earning even into six figures gets $2,400 plus $500 per kid.
Does anyone have reports of anyone getting it?
None of my friends who were laid off are getting it yet and the states they talked to say they are waiting guidance from the labor department.
I used to do taxes for extremely poor (<$10K yearly income) people in Michigan as a volunteer thing. For most of them, I could get the ~$3.5-5K earned income tax credit. A huge windfall? No, these people need that money for basic expenses like feeding their kids.
I can guarantee you these same folks—and the millions that suddenly lost their jobs—are not looking at a $1200 check and thinking, “sweet, 6 months of weed money!”.
But yeah, I’m “thinking about it wrong”.
If you are paid weekly, the amount of cash you have in your pocket might only be $50, and then only on a Friday night, so $1200 looks like an extraordinary windfall.
Has anyone on here ever actually been poor before? Genuinely curious.
Being self-employed, my dad's income was irregular and often came in $5000 chunks. You might call that a windfall, but my parents were disciplined enough with their money that it automatically went into a savings account for the next mortgage payments, or to pay off credit card debt[1]. We weren't suddenly going out to eat when a cheque came in (in fact, when I was 10 or so, I remember helping my mom enter receipts into her big accounting book, and the total restaurant expenses for the entire year was something like $30).
I don't think we were ever officially under the poverty line, but with a family of 11 in a high cost of living area, the money had to go a lot farther than normal.
[1]: Unfortunately, they weren't disciplined enough to build up and maintain an emergency fund to carry them through rough times, so they relied on a low-interest credit card for essentials way too often.
Going off closing lows, the SPY is up ~25% from it's ~223 close on 23 March. The Nasdaq Composite is up ~19%. That puts them back at mid-late 2019 prices, not 2016-2017 levels.
This all agrees w/your latter point - investors are already bullish again - but I wanted to add data points to supplement the market has recovered much faster than some people realize.
Most Americans are about to receive a $1200 check and unemployment benefits that pay more than their job did for the next 6 months. I don't think consumer spending is going anywhere soon.