Finances, Fear & the Future

An interesting July NBC poll of 50,404 Americans indicates we are concerned and confused about just how the Covid-19 pandemic is going to affect both ourselves and our nation. This can certainly be expected as it seems almost every day there is more conflicting information that becomes available. Recommendations such as open, don’t open, wear masks, they don’t help, who can spread the virus, who can’t, who is really at risk and who is not-so-much, seem to be the order of the day. The list goes on and on, and it can really get quite confusing. In addition, the list of health experts with absolutely opposite opinions stirs the pot even more.

What is really amazing in this survey is that 85% of Americans describe their personal economic situation as excellent, good, or fair, with only 14% describing their situation as poor. This is quite something for an economy that has been hurled from vigorous economic growth to a serious economic downturn in only one quarter. It would appear that for the still employed, the federal economic stimulus made personal finances better. For the newly unemployed, the stimulus significantly eased the financial pain. The enhanced unemployment benefit, while providing a work disincentive for some, has certainly eased the economic impact of unemployment.

However, even with the stimulus - and perhaps more coming - 91% of respondents are somewhat or very worried the Coronavirus will have a negative effect on household finances. There is so much uncertainty about the virus that citizens have significant fear about its effect on future events. The survey also indicates that 57% of respondents consider the situation to be more of a health crisis, with 41% considering it more of an economic crisis. Perhaps without the economic stimulus, these numbers might well have been reversed.

It is also stunning that 66% of respondents described the current state of the economy as good or fair. This is a much stronger number than would normally be expected with all the economic damage the economy has suffered. It is indicative of the fact that there may be more optimism concerning the future of the economy than we might expect. It also may be a sign the stimulus efforts have been effective. The direct payments to taxpayers ensured that the funds went directly into the pockets of citizens, so there has been no trickle-down issue.

The current national unemployment rate of 11.1% for June is down significantly from the 13.3% rate in May and the peak 14.7% rate in March. Clearly the economy is recovering, with most projections for unemployment in the 8% range by the end of the year. We are fortunate here in Arkansas to be at 8.0% now. The most obvious reason for this is that Arkansas did not implement any type of lockdown but let most business activity in the state proceed as normal. By comparison, the current state unemployment rate for New York is 15.7%, New Jersey 16.6% and California 14.9%.

Other results from the survey indicate 58% of citizens have been generally happy with their governor’s response and trust them to make appropriate decisions for the citizens of their states. They appear comfortable with allowing their governors to make these decisions, which is consistent with our federal model of government. However, 77% of respondents are still worried or very worried that a second-wave of Coronavirus could occur, and 62% are concerned that businesses may be opening too quickly.

I think it is very important to realize that as important as the federal stimulus has been, it has its limitations. It is essential that we get the nation and Arkansas back to full employment as soon as possible. This survey indicates a significant level of concern for both health and the economy. We have to determine we can both protect the most vulnerable and at the same time get back to work and recover our economic power. We can do it. We are Americans. We have a national history of persevering and being victorious in tough times.