The latest expiration date for the national eviction moratorium, set by the CDC (!) is July 1. Over the last six months, an average of 5.9% of renters have failed to make rent. Over the same six month period one year ago, 4.0% failed to do so. That’s a nearly 50% increase in payment delinquencies from 2020 to 2021. With 43 million people renting in the US, that means 2.5 million people face eviction proceedings if the moratorium is lifted.
On the other hand, it’s still a small fraction of renters who aren’t keeping up on their payments. Why, if the low end of the economy has been beaten and battered so badly since Covid began, are the vast majority of renters managing to make due month after month?
Good old American industriousness, maybe. Or it could be because January 2021 was the highest month for personal incomes in the history of the country, breaking the previous record set in April of 2020. The data for March 2021, to be released in the coming weeks, will get confirm that it shattered both of those previous records.
What happened in April, January, and March? Stimmy checks, that’s what. Along with extended unemployment benefits it has meant almost nobody suffered income setbacks on account of the societal response to the virus. Tens and tens of millions of people lost their jobs, yes, but not their incomes. The shortfall was and continues to be, like so much else in America today, funded by the TreasureFed.
Not through taxes, at least not in a cost accounting sense, but by the Treasury Department working hand-in-hand with the Federal Reserve. Last month, the federal government spent $927 billion and collected just $267 billion in taxes. That means the daily budget deficit for the month of March was $21 billion. That’s nearly $1 billion an hour, or $15 million a minute, more in government outlays than in government ‘revenues’.
If the Fed raises rates, the financial markets will implode. If the enhanced, extended unemployment benefits paired with the stimulus checks every few months that have already delivered America’s its seminal UBI stop, the number of uncollected rents and unpaid mortgage payments will skyrocket. The homeless crisis afflicting many of America’s biggest cities will get worse.
The Biden administration isn’t going to allow that to happen on its watch. There is no way off this dollar deficit ride. Either the thing is impervious or the crash is going to be horrific, much worse than the Great Recession. Worse than the Great Depression, too.