What happens when the biggest benefits cliff in US history collides with the biggest fiscal & monetary cliff ever?
Wealthion founder Adam Taggart provides a quick explainer video on one of the biggest stories not getting sufficient attention right now: the reduction & expiration of federal unemployment benefits to nearly 10 million Americans.
This expiration represents the largest benefit cliff ever for the US.
To recap: in response to the tens of millions of job losses resulting from the COVID-19 pandemic last year, Congress passed the CARES Act and the American Rescue Plan, which issued an unprecedented amount of emergency federal unemployment benefits to laid-off workers.
These extraordinary payments were distributed under 3 programs — the Pandemic Unemployment Compensation (FPUC), the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) — all which started in 2020, were extended several times, and just expired this past Labor Day weekend.
With their expiration, roughly 7.5 million Americans will lose all the federal unemployment benefits they’ve been receiving. Another 2.7 million will see their benefits cut by $300/week.
This is a stark cut-off, as most recipients were receiving over $25,000 per year from these programs, which collectively injected over $268 billion dollars into US households… and thus into the economy.
The instantaneous loss of these weekly payments to 10 million Americans will have implications both economic, financial and social. But make no mistake, this will be deflationary to the consumer spending — those benefit checks (“stimmies” as many called them) have been used to buy everything from essentials like food to discretionary items like cars to meme stocks and speculative cryptos like Dogecoin over the past year.
And as I’ve reported in this past, the expiration of these benefits also correspond with the recent expiration of the federal moratoriums on rental evictions and home foreclosures.
So not only are these folks losing their benefit checks, but millions of them may soon be at risk of losing the roof over their head, as well.