That last 20 years, America has witnessed three major crisis events, not including the personal tragedies that plague families. The country lived through September 11, 2001, the Great Recession in 2008-09 and now this pandemic. All three events became economic issues for our country, received (and deserved) federal response, but they were not handled equally.

The current Vice President, Mike Pence, was a Congressman at the time when he shared stories of how he and others worked together in the wake of September 11th.  Huddled together in board rooms in Washington, our leaders from both parties worked together for a strategy and a response to move our nation forward.  We should have been proud and grateful for their swift efforts.

The calamity of the financial crisis in 2008-09 was not helped by the behavior in Washington.  The delayed response while congress worked to figure out how to get the upper hand for their particular party cost our country dearly.  If they had a chance to do it over, they would.

This virus is no joke.  It is scary and sad. The chaos created economically is also devastating.  People are losing jobs.  Businesses are closing permanently. Bankers are working on Sundays to try and save those companies they can.

The media has portrayed the Washington response as political and calculated.  Perhaps part of it was, but this is far more like a September of 2011 response than a 2008-09 response.  Washington acted swiftly. They should have and did, but it doesn’t mean it is all smooth in how it functions.

The CARES Act had more than 16 components that will impact American businesses and families.  It is complex and confusing.  Knowing which branch of government has ultimate responsibility has frustrated a fair share of business owners and bankers.

Greg Bramwell of Star Financial summed it up like this, “This is historic.  Historic in size and complexity.  The only thing greater than the need for the business owners to get financial relief is for bankers to get more clarity on how to help.” Some banks have yet to take applications for loans, and others have already stopped!

We will be addressing the questions around the CARES Act in our Facebook group, Financial Enhancement Group Financial Tidbits. There is no purpose in attempting to explain the complexity of each part of this act to every individual.  We decided to break in into chunks to help you understand what you need to consider.

The implications are broad, including student loans, required minimum distributions, business loans, and even retirement account loans. We will break each of these down for you on the podcasts, but understand, rules still change daily.  With the government’s effort to get this out rapidly – and they should be applauded not chastised on both sides of the aisle – some “i’s” weren’t dotted.  We need more clarity, but a swift response was necessary, and both the Federal Reserve and the government (no, they are not the same at all) responded accordingly, albeit not perfectly. 

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see our Disclosure page for the full disclaimer.