Futurist Rebecca Costa suggests four practical measures the government can act on now to head-off further economic duress caused by the pandemic shutdown.
Rebecca Costa speaks
Rebecca Costa visited PDR to discuss her suggestions to help get Americans through the COVID economic crisis. We got into some substantial economic discussion previous to her articulating them.
- Make 2020 and 2021 unemployment benefits non-taxable: The likelihood citizens who are out of work are in any position to pay taxes on unemployment income is near zero, which clears the way for the IRS and State tax authorities to step in. And by step in, I mean collecting interest, lien or seize homes and bank accounts, levy future paychecks, etc. When an individual falls behind paying their taxes, these are all fair game.
- Extend mortgage contracts: Make it legal, easy, and cost-neutral for property owners to rewrite the terms of existing loans so missed payments are made up on the backend of a longer loan. If 30-year mortgages could be converted to 32-35 year terms or longer (without using the rewrite as an excuse to tack on predatory fees or raise interest rates), families will be able to remain in the homes they own, and landlords would not need to force tenants to make-up missed rent. No harm, no foul – everyone hits the reset button and starts over from scratch. More importantly, we prevent another housing collapse, global recession, and mega financial institutions’ government bailout.
- Reign in Credit Bureaus: The government can work with credit bureaus to adjust their algorithms to accommodate the effect late payments during the pandemic have on an individual’s future creditworthiness. Government leaders can also put a freeze on raising credit card and other loan interest rates based on changes in credit scores throughout 2020, 2021, and as long as the pandemic persists.
- PPP Lines of Credit: Replace the current on-again-off-again PPP loans with government-insured 1, 2, and 3-year PPP lines of credit, at zero interest, for small businesses that have incurred debt as a direct result of a government-mandated shutdown. Not only will this provide access to the long-term capital they will need to get back on their feet, but it also buys them time. Business owners will no longer be left guessing (Will Congress pass another package? When? For how much? Are we eligible?). They will be back in control. A government-insured Line of Credit will allow them to plan and use only the funds they need for what they need.
Rebecca Costa is the author of the books, “On the Verge,” and “The Watchman’s Rattle.”