MAK: Sounds like there is another delivery. I hope it’s that tree bark made of chocolate mom ordered.

GRANT: Or maybe it’s Hot Pockets. I love those things. Cheese, pepperoni, tomato sauce, all in one hand held food delivery system.

MAK: Yes those things are great, for sure.

GRANT: Do you think dad’s going to make us do Yoga again today?

MAK: Probably, I’m getting sick of doing downward dog, but I’m clearly great at the Goddess Pose.

GRANT: I think if I have to do one more Happy Baby, I may cry.

MAK: You know dad, he’s really serious about staying healthy through this. I think you need to embrace the reality.

GRANT: Yeah, you’re probably right.

MAK: Hey, you know in the last podcast we looked at how the federal government spent $3.5 Trillion of tax money, right?

GRANT: Yep, and a little more. So?

MAK: Well, there was something on the news that said the government approved an additional $2 Trillion of spending due to Corona.

GRANT: Seriously? How can that happen when we just spent the other $3.5 Trillion?

MAK: I don’t know. That’s why I’m a bit confused. It’s supposed to get the economy going.

GRANT: Maybe I don’t understand what the economy is, because isn’t the economy already going?

MAK: Maybe I’m missing something. That doesn’t sound right to me either. But Corona is doing a backflip on to a body slam and crushing a lot of things.

GRANT: Do you have any idea where that money comes from?

MAK: Sounds like it may have just magically appeared. We both know that $2 Trillion is more than ½ of the federal tax collected in a year.

GRANT: Well, it can’t be extra taxes because less people are going to be working and buying things. Is it printing money and bonds?

MAK: Sounds like it. But, it seems like a question for Mr. Money….

MAK/GRANT: Mr. Money!!! Where is the extra $2 Trillion going?

DAD: Hey what’s up guys? How do you like my “wounded peacock”? Beautiful, huh.

GRANT: Wonderful dad. You’re getting better.

MAK: Yeah, you don’t look like you’re going to throw up any more. You definitely looked wounded.

DAD: I know. I’ve had a lot of time to practice due to Corona. How about this one??

GRANT: What is that?

DAD: Google, Shy-ana-sana.

MAK: Is that supposed to be the “scorpion” pose? You do know you need to be on your elbows, right?

GRANT: And, your butt is supposed to be off the floor. Are you sure that’s not the “Cow Face Pose”?

MAK: Yeah, you get to sit for that one.

DAD: Ok, I get it, I need more work, but you both get to do it with me later. Maybe if we get you to connect to the universe and quiet your mind, I can quiet your mouth too?

MAK: Ouch dad. We’ll definitely work on it.

GRANT: Sure. Yoga is a pretty stimulating activity I’ll have to say.  

DAD: It’s spiritual, and it’s great to stretch to. Plus, it helps my back a lot, because it’s totally great for your core.

MAK: I like it because it’s kind of fun to see Grant fall on his face occasionally!

GRANT: Look who’s talking. Your “tree” pose is more like a “falling tree” pose.

DAD: Ok, yoga is supposed to make you calm and kind. Maybe we should move on. Do you need something because you’re interrupting my connection to the universe?

MAK: Well, we heard something interesting on the TV about a stimulus bill for $2 Trillion to help get us through Corona.

DAD: Yeah, that’s true. Congress passed that several weeks ago in order to try and help businesses and people with some of the financial issues due to Corona.

MAK: When you say financial issues, that means problems created from Corona that negatively affect the money we make and spend, right?

DAD: Yep.

GRANT: Well dad, we just went over how more than $3.5 Trillion in taxes is spent. Now, this spending is to try and keep the economy going? What the heck is going on?

DAD: Well, do you remember what an “economy” is? It affects all of us.

MAK: Isn’t that how all the money moves around from the production and sale of goods and services.

DAD: Excellent. “Goods” are things you can touch, like a car, house, food and more. Services are things that people can do. You can dig a ditch, do accounting work, serve people in a restaurant and more.

GRANT: Ok, so we want the economy to run well, so people have jobs to earn money in order to buy things they want and need.

DAD: That’s perfect. People want to work so they can buy things they need, take care of their families and have some fun. So what have YOU seen with Coronavirus?

MAK: Most people are at home like us. So I’m guessing many businesses are shut down.

DAD: Very true. Can you name one group of businesses that have been affected because you can’t be within 6 feet of anyone else? I can, because I dream about it daily!!

GRANT: Restaurants!!

MAK: Bars!!

DAD: Hey, this is a family show, we call those “Adult restaurants”, if they have food 🙂

GRANT: What about Movie theaters?

MAK: Cruise lines?

GRANT: Hotels?

MAK: Disney World?

GRANT: Airlines?

DAD: Wow, you named some big ones, for sure. And, you’re right. If no one is going to any of those places, what do you think is happening to the business?

MAK: They are losing money, so they have to make adjustments. Would people lose their job?

DAD: Absolutely. And, if people lost their jobs and don’t have money, can they buy food, clothes, gas, pay for their home or other stuff they may want or need?

GRANT: That would have to be “no” dad.

DAD: You’re right. So do we want businesses running who make donuts, chocolate, video games, airline travel and lots of other stuff?

MAK: Absolutely. Without them, no one is working, and nobody is buying stuff which means other businesses aren’t supplying it. It means less chocolate.

GRANT: Sounds like when one business stops working, it affects another business.

DAD: Yep. In order to slow down the Coronavirus, the government shut things down. Many businesses are affected, which affect people’s jobs, and so they’re trying to make up for it.

MAK: Is this where the over $2 Trillion comes in?

DAD: It’s called the “Coronavirus Aid, Relief and Economic Security” package. Or CARES for the first letter of each word. It’s the largest emergency economic “stimulus” package in history

GRANT: Seriously, they want to “Stimulate Us”? Or do they want to Stimulate the US? See what I did there. “US” and “U” “S” ?

MAK: Very funny. Not sure I understand what’s going on though. What does “stimulate” mean? And, is Trump trying to stimulate us?

DAD: The word “stimulate” actually means to increase activity. You know, stimulate your mind with a good book or stimulate you to exercise. And, “no” the government is trying to stimulate the economy and not Trump.

GRANT: So, this would be to increase the activity in the economy?

DAD: Sure is. You could probably figure out some ways the government can do that if they had $2 Trillion.

MAK: Sounds like getting money into the hands of businesses and people would really help.

DAD: You got it. Where do you want to start?

GRANT: How about the people who lost jobs. Didn’t we say there was unemployment money from taxes?

DAD: Yes, but with this extra money, they really increased the amount people get because so many people lost their jobs, that’s $260 billion.

MAK: Awesome. That should help out a lot. When people get money after losing a job, they can buy what they need to stimulate things!

GRANT: Dad didn’t you say we got a “stimulus” check too? What is that?

DAD: Well, each adult could get $1,200 and the parents would also get $500 per child, as long as you don’t make too much money on your taxes.

GRANT: So, $1,200 for you and mom and $500 for Makenna and I? That’s $3,400. Just for the record, I didn’t see any of that money!!

MAK: Me neither. $500 is a lot of cheddar!! Dad, share the wealth!!

DAD: Nice try. The daddy and the mommy get the fruits of our labors.

GRANT: Ok, I don’t know what that means, and I don’t think I want to. So, how much is spent on those two items?

DAD: Well, when you take the extra unemployment money and stimulus checks. That’s more than $550 billion or more than ¼ of the $2 Trillion.

MAK: So, that’s a lot, but where’s the rest of it going. It has to be businesses, right?

DAD: Well, since many companies are losing money with little or no activity, they need money to pay their bills or employees through this hard time.

GRANT: So, is it free money or do they have to pay it back, like a loan?

DAD: It depends, some of the money is free if you use it to keep paying employees while there isn’t a lot to do. What does that sound like?

MAK: Isn’t that like unemployment payments?

DAD: Exactly. If you do that, you don’t have to pay some of it back, and you keep your employees for a couple months, until things start to get better.

GRANT: So, how much is put aside for that?

DAD: Well, $850 billion is put aside for businesses loans, money to airlines as well as the money for keeping employees.

MAK: Wow, that should help for sure. The airlines must’ve been hit hard. Oh, but aren’t we missing something?

GRANT: Yeah, don’t we need money to fight the Coronavirus?

DAD: Great point. How much have we spent so far?

MAK: $850 Billion on businesses.

GRANT: And $550 billion on unemployment and cash payments to families.

DAD: So, that’s $1.4 Trillion. How much do we have left?

MAK: Doesn’t that mean there is still $600 billion left?

GRANT: Sounds right to me, if we started with $2.0 Trillion and spent $1.4 Trillion.

DAD: So, the federal government is spending almost $400 billion to fight Corona.

MAK: Wow, another big number.

GRANT: With all the hospital costs, the testing and other stuff, that doesn’t sound like it’s enough.

DAD: I don’t know, but it definitely will go quickly.

MAK: So, after that, there’s $200 Billion left.

GRANT: Is this the money that goes to everything else?

DAD: Yep, some goes to schools, other to food banks, community health programs and various other items.

MAK: Wow, that’s a lot of stimulus for sure, but it should help to increase economic activity.

DAD: It should, but this has never happened before, so you can’t always be sure it will work or if it goes to the right places, or if it’s enough. We won’t know how bad things get until we’ve gotten past it all.

GRANT: Good point dad. Isn’t hindsight always 20/20?

MAK: What does that mean?

DAD: It means you never know if you made the right decision, until you look backwards after it happened.

MAK: Is that like picking a chocolate from a box of chocolates, and not knowing if you got something good until after you bit into it?

DAD: Sure is!!

GRANT: And, I’m assuming this means the government is either going to print money or sell more bonds?

DAD: Yep, which will raise the interest we pay on our debt, when we do our budget and spending each year.

MAK: Wow, this Coronavirus is tough and touches a lot. Federal and state governments will probably collect less tax this year too.

GRANT: Yeah, if people aren’t working, that will affect a lot of things.

DAD: Probably a good place to stop. Let’s stay healthy, so we can all get back to work.

MAK: For sure. Thanks Dad!

DAD: Thank you.

MAK/ GRANT /DAD: And, let’s beat Corona. BYE!!

Ben’s 2 Cents

We just finished our discussion on spending over $3.5 Trillion after collecting income taxes. With the CARES stimulus package to support efforts to fight Corona and stimulate the economy, this spending is a huge increase from what was budgeted to get the economy back on track.

Over the last 6 weeks ending April 25th, there have been over 30 million jobs lost. This is absolutely historic as the largest job loss ever in one week prior to Corona was approximately 700,000 in 1982. We’re averaging 5 million per week or over 7 times that number. The CARES package was set up to help individuals, businesses and the economy, due to the ramifications of Coronavirus.

Of the over $2 Trillion in the CARES package, unemployment payments are set to be over $250 billion, along with $300 billion of cash sent directly to many taxpayers to keep money in our pockets to pay our bills and buy what we need. That’s a lot of mailbox money. Another $850 billion is to help businesses make it through these tough times, while things are slower for many. Then, $400 billion is being spent to help state and local governments as well as hospitals to deal with the financial impacts of testing and caring for patients.

The financial implications are enormous. At a time like these, it’s important to try and conserve any cash you can, because things are so uncertain? Managing expenses is very important as well. If there is anything you can adjust in order to save your money, it’s time to really focus. The government is trying to help, but they aren’t sure exactly what’s going to happen either.

As things are opening up, we all hope it will return to normal quickly. But, many aren’t sure what normal is anymore. So, if you’ve received any stimulus money, or a tax refund, conserve it the best you can. You may need it. Please stay safe and healthy, and we’ll see you next season on Money With Mak And G. BYE!!!