The Challenge Ahead
Updated: Nov 2, 2020
Regardless of who wins the election, getting the economy hitting on all cylinders will be a challenge based on Covid restrictions (some reasonable, some not), a languishing global economy, and already high levels of government debt. Since February we've been in various stages of shutdown in various places and that has created deep scars in the economy.
Over this time period, the US individual savings rate has actually doubled (Chart below), but that doesn't tell the full story.
The savings rate for those working and with disposable income has doubled, but the gap for those who cannot have decreased their savings cushion and it is affecting their bill payments. Based on a survey of over 1500 US households, the doxoINSIGHTS Bills Pay Impact Report shows the following:
57% of consumers’ incomes have taken a hit in the past seven months
70% have delayed discretionary spending on big purchases
75% continue to be very worried about their future financial health
Below is a graphic from Visual Capitalist* that shows that deferring payments is becoming increasingly widespread in certain areas...
While there is a window to get some stimulus and debt relief done in Congress, it is far more important to come up with opening criteria in those states that remain closed before personal and eventually municipal bankruptcies begin to cascade.
There is a lot of work for the next President, Congress, Governors, and Legislatures regardless of who they are. They need to get America open and running again. *here's a link to the excellent Visual Capitalist website: https://www.visualcapitalist.com/pandemic-impacting-american-wallets/