Hi everyone, this is Dr. Nitin Chhoda.
Welcome to this brand new
update from the Ignition Time channel.
My name is Dr. Nitin Chhoda and my channel is
Ignition Time. In this video,
I'm going to talk to you about
the President's sliding scale
proposal on employment.
And I'm actually going
to make a bold prediction.
I don't normally make predictions because
my wife likes to remind me
how often I'm wrong.
But I'm going to make a prediction here
because I think I see what's going
on behind the scenes. In this video
I'm going to go over with three things.
One is the summary of the two plans
that are being considered
by the Republicans right now.
Number two, I'm going to talk to you about
how long some of these plans are actually
going to take to implement,
because we have new data from some
important associations,
national associations,
that suggest that it could take anywhere
from 8 weeks to 20 weeks to implement
some of these more complicated
unemployment benefit extension proposals.
And I don't deal with the financial
and the structural challenges that exist
with the state unemployment systems.
I'll also answer the question.
And by the way, this question was answered
by the U.S. Treasury secretary
Steven Mnuchin, and the
Mark Meadows, who is
the White House chief of staff.
And they were asked, what if
states cannot make the shift?
What if the $200
bonus is not enough?
You'll hear what they
have to say about that.
And I think you're going to be pretty
surprised with what they have to say.
And finally, I'm going to make a bold
prediction at the end of this video.
Now, I want you to understand the entire
framework before you
skip to my prediction.
And again, I could be wrong
with my prediction,
but I'm going to go I'm going to put
my neck on the line and make a bold
prediction at the end of this video about
how all of this is
ultimately going to pan out.
So let's talk about somebody of the two
plans that are now actually being
considered by the Republicans.
Now, this was actually reported
by Jeff Stein, who's a reporter
for The Washington Post.
And I think he does some
phenomenal reporting.
I link you folks to his Twitter feed
down below, and I encourage you
to follow his Twitter feed.
And, you know, some really good
reporting from Jeff Stein.
So he said that two plans being
considered right now by the Republicans.
The first is a $200 per week
booster instead of the $600
per week booster through the rest of 2020.
So in other words, the $600
per week would now be cut down to $200
per week, which would likely
be kept throughout 2020.
So that was the first plan.
And the second plan seems to be something
that the U.S. Treasury secretary has
talked about, have done
other videos about that.
The President has talked about that,
which is essentially a sliding scale.
What does that mean?
So that would mean that cutting the $600
per week down to $200 per week
for several weeks and then
replacing that bonus
with an individualized wage replacement
based on 70%
of a person's prior income.
So the GOP has been saying they
want 70% wage replacement.
In other words, workers would
get unemployment benefits
that would equate to 70%
of what they had been earning prior.
In other words, the state benefit and I
have done another video talking about
minimum and maximum state benefits.
So you want to check that out
on the channel. State benefit
plus the federal buster would be
approximately 70%
of a person's prior wages.
So what is the underlying plan
behind all of this?
The underlying plan is
the White House wants to end,
in fact, the $600 unemployment weekly
booster has effectively ended at the time
that you're watching this video.
And they want to replace them with 70%
of a worker's previous wages.
So currently the plan is that the states,
the states actually with the unemployment
benefits are replacing it on 45 percent
of an individual's wages.
That's the basic structure
of the unemployment system
with the federal bonus of approximately
two hundred dollars per week, which,
by the way, is way down
from the current six hundred dollars.
That's a substantial reduction.
The goal from six hundred
$200 a week.
That would replace.
Right.
Those 70 percent of average workers wages.
That's what's being considered now.
Here's a problem.
And again, all of this is
reported by Jeff Stein.
A lot of credit goes to him.
I think you should check
out his Twitter feed.
The problem with the with the first plan,
according to some Republicans,
is that that flat two hundred dollars per
week bonus does not reflect
differences in prior income.
So in other words,
the $200 per week,
some individuals would end up still making
more than they made with prior wages,
because if they were low income earners
and that would still
result in a substantial increase
above and beyond what they were
making prior to these benefits.
Number two, that would be substantially
lower for some individuals.
I mean, if you were making seventy
five thousand dollars a year, though.
Forty five percent of the state benefit,
plus 200 dollars per week,
it doesn't come close to your 70 percent.
So in other words, they said that this
would be fundamentally imbalanced.
And the problem this essentially is
the problem with the first plan.
Now, the second plan that they
have aims to fix this problem.
So this is essentially an income disparity
problem and they have a second plan in.
The second plan is that have the federal
boost and other ways have the federal
government kick in with 50 percent of
the state unemployment insurance amount.
So let's say your state unemployment
insurance amount was three hundred.
The 50 percent of that would be 150.
So you would get 300 plus 150.
And that would get you
to approximately 70 percent.
Because think about it, if your.
fundamental state unemployment.
Wages are unemployment
benefits are 45 percent.
Half of 45 percent is
twenty two and a half.
When you take the 45 percent and then you
add 22 and a half percent, that brings you
to write under 70 percent of the revenue.
Now,
from a theoretical
from from a mathematical standpoint,
they have you know, they have
this this belief, if you will.
But how is this actually
going to be implemented?
How is this going to be executed?
Because states are completely overloaded.
States are completely overwhelmed.
I just did a video on my channel where I
talked about the significant fraud aspects
of the unemployment benefits system.
A lot of people are having their benefits
pause, so states simply aren't even able
to keep up with those with a six hundred
dollar unemployment boost,
let alone a complicated calculation
of 70 percent of a person's prior wages.
Now here's a problem with
the second plan, according to the U.S.
labor secretary, Eugene Scalia.
Now, in case I'm sure,
my subscribers know this,
but Eugene Scalia,
the U.S. labor secretary,
was nominated by President Trump.
So you have a very important part
of President Trump's administration,
basically saying in his exact words,
this this is basically
said is very challenging.
States already having
enormous difficulties.
And Senator Ron Widen,
who's the ranking Democrat
on the Finance Committee,
he said that basically Scalia
said that it can't be done.
Now, also, as you know,
states are struggling right now.
They are getting crushed right now as
they try and distribute UI benefits.
A lot of my subscribers
in the state of Florida, for example,
you know exactly what I'm talking about.
The same problems exist in other
states as well, California.
Ohio is having some problems, too.
So a lot of a lot of Democrats
and economists, however,
are saying that going from six hundred
dollars down to two hundred dollars per
week or 70 percent of a person's income
would spell disaster for individuals
for the over 20 million plus individuals
who are currently on unemployment.
And that would be a problem
for the broader economy.
So overwhelmed state officials will
struggle to keep up with this change.
There's no doubt about that.
Now, let's talk about how long it would
take to implement
the financial and the structural issue
with these proposed state unemployment
benefit changes and the federal
unemployment benefit
changes going forward.
This is not just a financial issue for
more than 20 million American families.
This is a structural issue
for the state unemployment benefits system
because the systems are not geared to be
able to provide these kinds
of customized benefits.
No one planned for this.
No one could have predicted this.
And it takes weeks to reengineer those
systems that number 1. Number 2,
this is also a clear political divide,
a clear difference in political
ideologies, which is causing a gridlock.
In fact, like I mentioned in the video
the other day,
the Republicans are struggling to see
eye to eye with the White House.
And then after that, they have to go
and negotiate with the Democrats.
So that is why
that is a structural problem and that is
a political problem on top of a financial,
human, real life problem
that we are facing now.
The National Association
of State Workforce Agencies,
they actually released a memo
and this memo I'll link you to this
memo in the description below.
So I definitely want you to check it out.
They are actually a national organization
that represents all 50 workforce
agencies, D.C. and U.S.
So they are essentially
responsible for all of this stuff.
They warned Congress it would take
approximately eight to 20 weeks.
Okay, approximately eight to 20 weeks
to transition to a more complex system.
So the more complex this gets,
the harder it's going to be for this to be
actually implemented by the states
in the next round of unemployment
benefits extension.
So I will link you to the memo
in the description below.
And like I mentioned, Eugene Scalia,
the U.S. labor secretary,
specifically said that, in fact,
the Department of Labor specifically said
that it is strongly it's strongly opposed
unemployment based on previous wages
because it would be exceedingly difficult,
if not impossible to implement.
These are the words from the Department
of Labor, exceedingly difficult,
if not impossible to implement.
Democrats, as you know,
are pushing for an extension of the six
hundred dollar unemployment benefits
and argue that reducing or delaying this
elevated assistance will have devastating
ripple effects on individuals
as well as the economy overall.
And Republicans have for months, however,
warned that the six hundred dollar
unemployment benefits which were passed
with the Cares Act will discourage many
Americans from going back to work.
So a lot of economists have said that they
believe that a cut in unemployment would
mean millions of individuals
will will have fewer jobs in the coming
year because it would create more long
term unemployment related problems.
Now, here's the interesting thing.
Treasury Secretary Steven Mnuchin
and the White House chief of staff
Mark Meadows
did insist last week
that the technological challenges will not
prevent the roll out of unemployment
benefits going forward.
So, as you can see,
there is a consensus that there will
be continued unemployment benefits.
But there's no clear consensus about
how much and how they'll be rolled out.
But this is where things
get really interesting.
As you know, Democrats
are pushing for this.
And one of the Democrats against
Senator Ron Wyden and who is the ranking
Democrat in the Finance Committee
specifically said without data technology.
It would take states weeks to implement
any change for the six hundred dollar
boost, this would cause
significant disruption.
The only option that ensures families can
pay August rent is extending
the six hundred dollars now.
Now bought Mnuchin and Meadow's were
asked what are states
cannot make the shift?
What if the two hundred dollar
bonus is simply not enough?
And here's what they said.
The White House chief of staff,
Mark Meadows, said the difference would be
made up by the twelve hundred
dollar stimulus check.
So stimulus checks are
going to be mailed out.
The Treasury secretary,
Steven Mnuchin , said, and I quote,
There are plenty of banks that are
willing to extend credit to people.
He said there are plenty of banks that are
willing to extend credit to people.
So that's what he said.
Now I'm about to make a bold prediction.
I don't normally do that in my videos.
And I are to be honest,
I don't like making predictions,
not because I could be wrong.
I'll tell you, I could be wrong for sure.
I don't like making predictions,
not because I could be wrong,
but because I don't want to give
false hope to any of my subscribers.
I want to create these videos
with a good conscience.
And I want to be able to educate my
subscribers with fact based information.
And my goal is to is to help you
prepare for a stronger future.
So,
you know, when I started this channel,
my goal was to provide financial education
and to help you plan, which I'm doing.
But there's one thing I've learned
from all of you is that there's
a lot of pain out there.
There's a lot of suffering out there.
But there's also a significant
amount of strength out there.
And it is your strength that actually
keeps me going to make these videos.
So honestly, I wouldn't want to give any
false hope to any of my subscribers,
but I will put my neck on the line right
now and I'm going to make
a bold prediction.
And, you know, I mean, I want to do
things with a clear conscience.
I wanna sleep well at night.
But again, I could be wrong.
But I'm going to make
a bold prediction here.
And I want to tell you why I'm making
this prediction that 10 percent
of sort of the reason for me making the
prediction is because I'm an optimist.
I'm a dreamer.
And I believe that at the end of the day,
the government officials
will do a right thing.
I don't think
Senate Leader Mitch McConnell.
I don't think President Trump or
Steven Mnuchin or Mark Meadows,
you know, want to harm
the citizens of our country.
I don't think Nancy Pelosi,
Chuck Schumer want to harm anyone.
I think that they're playing political
games and this political
gridlock is going on.
And a lot of individuals,
more than 20 million individuals are stuck
in between almost almost
like pawns in a game.
But I do believe one day we look back
at this and we'll come out
stronger on the other side.
And 90 percent of the reason
I want to make a bold prediction is a
politically and in the court
of public opinion.
I think it will be self sabotage
for them not to extend this in one way,
shape or form quickly,
not to allow it to lapse.
I think a lot of autos are actually
in swing states like Florida,
like Ohio, like Michigan.
And the fact is, at the end of the day,
this is a political game.
It's like a game of chess.
Some of the moves have already been made,
even though we can't see them yet.
And the idea is to be able to make
a proper conclude to sort
of make sense out of all this.
Now, the fact is,
in this type of situation,
I don't think either side wants
to sabotage themselves with, what,
20 million adult unemployed voters.
The game simply goes on.
And I you know, I think this is what I
think the reality is when
the rules of the game are broken.
And right now, a lot of rules have been
broken and new rules are
being made as we go along.
The brain can't engage because
the brain needs simplicity.
The brain doesn't want complexity.
And it's hard for us to make sense of all
this, which is why it's easy for us
to believe that, you know,
this side is bad or that side is bad or
those who are unemployed are,
you know, lazy or whatever.
The brain simply needs
to make sense of all of this.
But one of the reasons I've been
successful in my life,
as I've been able to see what's going
on at the surface level and see what's
going on sort of beneath the surface.
And like I said,
politically, this would be sabotage
for this to end, especially with voters
in swing states like Florida.
Florida is a very, very, very important
state voters in Florida, Michigan, Ohio.
You know that.
voters that in swing state.
So I believe and here's my bold prediction
as I wrap up this with you, I believe
there'll be an announcement soon.
It could come from the president.
It could come from some
other government official.
I believe there'll be an announcement soon
that some version of the $600 a week
federal buster will indeed be extended
for some period of time.
And this whole thing about the 70 percent,
two hundred dollars will
be worked out over time.
Now, again, I have to warn you,
I could be wrong.
And I don't normally like to make
predictions, but I'm able
to see what's going on.
And this is what I believe.
And again, I wouldn't normally I don't
normally make predictions, but
10 percent of me wants it to happen.
90 percent of me sees
the writing on the wall.
Thank you so much for watching.
I really appreciate you watching.
If you did like this video,
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Thank you so much for watching.
We will get through this.
And I appreciate you watching.
I'll see you in the next video.
Thanks.
