Transcript
Paul Winkler: Paul Winkler, Ira Work here with me and Mr. Evan Barnard hanging out in the studio on this lovely cold day; it’s kind of just cold. I’m ready for spring summer. Bring it on. Stimulus checks emerge as a tool to fill gaps in targeted aid programs. This is kind of a, what’s to come type of a thing. I think right here, this in the Wall Street Journal, a policy once viewed partly as a bridge onto until relief could more carefully be targeted, became a recurring backstop to other programs during a bumpy recovery, despite concerns from Republicans and a few Democrats about giving money to people who don’t need it.
The Government Response to Recession
That sounds kind of biased, doesn’t it? No, no, no, no, no. The media, no, no. They would never do that. Any members of Congress now view the checks as an essential element of future relief legislation. It’s kind of interesting because it’s okay. So here we go. We had some problems. Let’s go and dip into the federal coffers and just throw money out. And like, you know, rain checks on people. The checks brought appeal stems from their near universality simplicity and speed, and they may become more routine government response to future recessions. We’re not going to have any recessions anymore guys.
That’s that’s it. Every time that the economy looks like it’s getting soft, we’re just going to start writing. Can you imagine what the federal debt would look like if that really ended up being the case, you know, and people I’ll tell you in three years, Oh, I’m really worried about the government spending and, and you know, and, and they’re saying, and you’ve heard me say this, that I want to go to. I haven’t had our clients, aren’t doing this, but you know, I’ve had a couple people that, you know, should I go to cash, Paul? You know, and I go, well, why? Because I don’t trust the government. And I said, well, you know, who’s issuing the cash, the government. And that’s probably not a really good idea. If it’s inflationary.
There was actually an interesting article about that. What fund managers are thinking regarding what is going to happen and investment managers there actually a lot of fund managers are actually believing that we could be in for more inflation as a way that was that they asked Biden. They ask what Biden’s most likely policy response is. But this is interesting. They ask what his most likely policy response to reduce the debt burden will be. So fund managers, this is them telling you, how is he going to deal with the debt? 34% believe it will be higher. Taxes were one, a 26% inflation. A lot of them are people going with the Warren Buffet solution, which is Warren Buffet basically made that comment that what we’ll do is we’ll inflate our way out of, out of it. So that’s a, that’s a big part of it. We’re back to this. So we have these payments going to employed workers likely to save the money until after the pandemic and their point is that, well, my point is, I’m just thinking through this and going through this. I oughta work wonders for people’s motivations to prepare for a rainy day. You know, if we know that the government is just going to come through and you know, why bother, you know, we’ll just wait until the recession comes in, right?
And they’re going to throw us money this way. And it isn’t political because, you know, if you look at this, Trump was wanting that same thing as well. You know, both sides of the aisle are wanting to throw money that direction. They say Democrats, then president Donald Trump and the 44 house Republicans embraced the idea of $2,000 checks in December. Under that plan, many households making over $200,000 would have gotten some money. Now what I was wondering, but I was just kind of curious about is people over 200,000? They’re saying, well, what we could do is we could cut it off. So people over $200,000, don’t get the check. You already do that. And then this check the stimulus checks.
Yeah, that’s it. That’s what they’re saying. That’s what we’re going to do. We’re going to have, is it, is it necessary to have a round of checks that go to households earning up to $200,000 a year? So they’re saying maybe we cut it off a little lower than that maybe, but I was just curious. And this one, I was just curious, what do you think, how, what percentage of, of households in the United States makes over $200,000? What do you think it is? Since the one,
Evan Barnard: Since the 1% is evil, I’m going to go with 1%.
Paul Winkler: What do you think Ira?
Ira Work: 3%?
Paul Winkler: Okay. It’s always a surprisingly high 6.9%. I didn’t, I didn’t realize that for 7% of households to make over that. Well, that’s fantastic. Isn’t that interesting? Well, you know, it’s not terrible. I mean, yeah. You look at that and go, wow. Land of opportunity. That’s why, you know, people aren’t, you know, they’re dying to get in. They’re trying to get in, they’re doing wherever they can to get in the country. And they’re not trying to swim over to Cuba. I mean, the reality of it is, but, you know, I just thought that was interesting.
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It’s Been an Entire Year of COVID
Evan Barnard: Well, it kind of brings up kind of just the whole COVID thing. And, you know, we find ourselves in basically the one year anniversary of when we first started having COVID discussions and first having the first reported case from the CDC. Yeah. And you know, a lot has gone on over that period. And I honestly can’t remember, it was March, April, May when we first started talking about PPP and the economic impact, disaster loan and so forth. Well, it’s not really been making news, but there’s another round of PPP money coming out.
And primarily it is aimed at first time borrowers, but there are provisions in this program for second time borrowers, there’s a few more homeowners, business owners that need to make payroll and to pay rent for those kinds of things. Back when you could get this, I can cover two and a half months of my expenses basically was kind of the basic
Paul Winkler: That’s right. For these lucky you were talking about, I’m sorry, I kinda got off that.
Evan Barnard: And so there’s been some legislation throughout the year that affects that. If you happen to take advantage of that last year, I used the term advisedly in terms of taking advantage of that. But at one point it was questionable. If you could deduct the expenses that you paid with this loan. Sure. And so there’s been legislation, the IRS originally, this is kind of interesting when you’re talking about the IRS that said, Hey, we’re swimming in my pond. Yeah, yeah, sure. The IRS said, well, without guidance, we’re saying you can’t deduct these expenses. And if Congress gets upset, then they can change the law. Well, Congress changed the law.
And so you could get your PPP loan and this would apply to this new round of funding. It’s around $35 billion for small business owners. And if you use the money for payroll and operating expenses, at least 60% for payroll and so forth, it’s going to be free. The debt’s going to be forgiven. So it’s basically a grant program. As long as you don’t just go buy a car or a boat with the money. And so it’s tax-free that a loan being forgiven is not cancellation of a debt. Like it typically would be right. It’s just tax-free and the money you used to pay those employees, you can still deduct.
Paul Winkler: Said, you’ll see your corporation. Yeah.
Evan Barnard: Wow. Anyway, that, you know, that’s going to, you’re going to be filing for those things this year, you know, for your 2020 tax year, get, you know, get with your tax versus not a good year to do it on your own, if you took advantage of any of these. But, you know, I’ve heard, I have heard nothing in the mainstream media about this new round of PPP money coming out. And that kind of surprises me just given the administration stance. Right. I would have thought they’d be waving flags from the mouth
Paul Winkler: So I look at the small business owners and sorely in need of it. You know, I’ve been watching some of the ones around here where we are and just seeing some of the things that they’re doing desperately to keep the businesses going. And it’s heroic. It’s phenomenal. I was watching one restaurant, they had a video this morning on Facebook of their restaurant and that’s just a phenomenal way to go guys, you know, getting, doing whatever you can to keep the business open and running and rolling until people get back to going out to eat. And hopefully that’s a lot sooner than later. Yeah, yeah. That, to me, that’s exciting to see businesses doing whatever they can and maybe getting a little help along the way.
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