Year 2020+1

Hi there folks, I’m trying to get into a rhythm of posting but this one will fall outside of that rhythm. I wanted to get some thoughts out there to help keep you focused and potentially provide insight you may not have considered.

Here we are on the day before the presidential inauguration. Many are projecting that now that the year 2020 is behind us and the new president is coming in, things are going to get back to normal.

I hope this is the case. I hope that we are truly on the road to recovery as a nation and across the globe.

If we are truly recovering, enjoy it.

I encourage you to keep your preparedness and readiness goals in mind though. This is not to say that we should run around with our hair on fire (this is never the correct response). This just means that as you go about your life, remember that you started on the preparedness journey for a reason and that reason has likely not subsided.

The year 2020 was harsh, primarily for three reasons. Unfortunately there doesn’t seem to have been a lot of progress made.

COVID

The COVID-19 virus is still a concern globally. Though it is most impactful to a small segment of the global community, for those people it can be extremely devastating. It should be taken seriously, especially for those folks and those closest to them. Even for those of us who think it has been over-hyped, it should still be taken seriously. There is no reason not to follow the basic protocols social distancing, wearing a mask (unless you have a physical reason not to), and washing your hands.

 I was a social distancing earlier-adopter. I haven’t liked people within six feet of me most of my life.

Some are hailing the arrival of the vaccine. Please remember that this vaccine is not intended to make you immune to the virus or even to keep you from spreading the virus. It keeps you from having symptoms. This can protect tens of thousands of people as, for most people, it is the symptoms that kill. Just keep in mind that it is still out there and that you still need to follow appropriate protocols for your personal situation and the protection of those you care about.

Expect mask mandates, continued social distancing, and other restrictions while a vaccine is developed that will actually halt the spread rather than halt the symptoms. My concern is that the current vaccines will provide false hope and people will become lax in the other preventative measures, allowing the virus to spread more easily or mutate at a faster rate than it otherwise would.

The Economy

With the lockdowns, the economy is still struggling. Even once the lockdowns are lifted, there is going to be a significant period where things will still need to unwind.

People who worked at businesses that will not open again will need to find jobs. Since the labor market will likely be flooded and businesses will just be getting back on their own feet, those jobs will likely come with a cut in pay, reducing overall consumer spending – which accounts for the majority of spending in a healthy economy. It can recover, but it will take time – and it will only start once people are allowed to work again.

The stimulus packages will need to be repaid. If they are not repaid, well, let’s not even focus on that. They have to be repaid. Government loans (which when you hear about deficit spending, that means the government is taking out a loan directly or indirectly) are repaid in two ways: taxes and inflation.

Higher taxes takes money out of the workers’ pockets by reducing money they have to spend and is a direct means of revenue for the government. Inflation takes money out of the pockets of the savers by reducing the value of money in savings, and is an indirect method by making money gained today be more valuable than money gained yesterday. I would expect both methods will be used. The Federal Reserve is already talking about letting inflation rise and the new administration has promised to remove the tax breaks of the soon-to-be-previous administration.

Add these factors together and we are likely to see a recession, if not a depression, as we come out of the lockdowns. It doesn’t have to be scary if you’re prepared for it. Unfortunately it is very difficult to prepare for it in with short-term actions.

Though the incoming administration as promised an extension on the eviction moratorium, this is not a forgiveness of debt. Those who cannot pay now are accruing a debt they may never be able to pay back and thus will face eviction once the moratoriums are lifted. In the meanwhile real estate is becoming more costly. Land owners must still make payments and maintain their properties. As this continues, it should be expected that many will sell (even at discounted prices) to avoid overhead on properties where they are losing money. This will likely result in a significant reduction in overall wealth in the nation, wealth that could have otherwise been used to rebuild. If you have investments in real estate (other than you primary residence), you may want to devote some time to your financial strategy with an advisor you can trust.

Social Issues

There have been no great advances in social issues over the last 9-12 months. All the same tensions that fueled the civil unrest of the summer of 2020 are still out there. Some segments of society are even more tense than they had been and even more unrest is being fueled. We’re currently seeing that over 20,000 National Guard from all 50 states have been deployed to Washington, D.C. and many state capitols are protecting themselves as well. Things have not calmed down yet.

Be aware of your surroundings as you go about your daily life – don’t let these issues keep you from having a daily life. Look a little further down the road that usual (literally) to make sure there aren’t road closures or obstacles.

Pay attention to entrances and exits from buildings. Most people try to leave a building by the same way they entered even if it is impractical. Be aware of side exits and rear exists. If things go sideways, don’t let “Employees Only” bar you from leaving by a safe exit. Get out the loading dock of the grocery store if you need to. If the situation warrants it, I’d much rather be outside and griped out by an angry store manager than be trapped in a building because I didn’t want to violate social norms.

The fact of the matter is that until we can talk, debate, and negotiate an agreement our society is going to continue to be splintered. Right now that is not an option. The outliers on each side are not willing to talk. My concern is that as long as differences cannot be settled by reasoned debate, they will be settled outside of reasoned debate. Most people I know, myself included, do not want that. It seems to be the direction we’re being led though.

Again, don’t be scared. Preparedness is not about being scared; it is about preventing being scared. When you are down to your last meal, you’re scared for food. When you’re down to your last dollar, you’re scared for money. When you cannot escape an attack, you’re scared for your safety. Prepare for these things and then you can stay alert for situations that impact you, but you have the resources and planning so you don’t have to be scared.

So while the calendar has turned, this year may end up looking a lot like last year. So rather than being in 2021, we may be in 2020+1. Let’s hope we can get it together so that this is the last 2020 we have to suffer through. In the meantime, keep to your preparedness goals. This is not the time to slack off.