Brunch & Budget

b&b222: Exposing Loopholes in the CARES Act + Your IG LIVE questions answered!

May 06, 2020 Brunch & Budget
Brunch & Budget
b&b222: Exposing Loopholes in the CARES Act + Your IG LIVE questions answered!
Chapters
Brunch & Budget
b&b222: Exposing Loopholes in the CARES Act + Your IG LIVE questions answered!
May 06, 2020
Brunch & Budget

Our first IG Live! Today we're talking about how the CARES Act wasn't made for us, as usual, but what you can do within it anyway.

Questions answered:
Did anyone in there bring up the subject of being asked to come back in to work or have you discussed with others what to do in that situation?? I'm working remote now but they're telling me I have to go back to the office with no real substantive reason
--

I have been freelancing- I usually get paid via payroll and receive a W2.  I filed for unemployment, I live in NJ & applied to both states(note sure if I will get approved in NY or NJ) and I put the last employer that I was working hours were reduced due to Covid and this past Friday, I was officially released, no active projects, all Covid related. Did I file correctly using my recent employer's info or should I have used myself?

Can you also clear up if someone is fully 1099 that they will receive benefits as well, filing all info as "self employed?" Will qualify for both Federal & state or just Federal?
--

if I work in a state I don’t live in (i.e. CA) as a contract worker and was told I can apply for unemployment by my boss... but I don’t live CA, I live in NY.  Do I apply to CA or NY?
--

Are the $1200 checks a “loan” or will it reduce my tax refund next year?
--

I wanted to learn more about how the federal loans are being paid off. I thought it was just a forbearance.

--

Hi there! I have a question/need advice on my student loan situation that I was hoping you could answer at your IG live today... I have $4500 left and I applied for student loan forgiveness because my school (DeVry) made false claims and a lawsuit was settled back in 2018. In December, my application was finally added to the queue for review-yes it took 2 years for that. So it's been in administrative forbearance since then and I only paid interest on it in January and February. My question is: should I pay it off or wait to hear back to see if it'll be forgiven partially or wholly? I have about $1500 in other debt that I should be done with by end of June.

Thank you for your time and ALL that you do for us. I have been a fan for years 💜💜💜💜


Show Notes Transcript

Our first IG Live! Today we're talking about how the CARES Act wasn't made for us, as usual, but what you can do within it anyway.

Questions answered:
Did anyone in there bring up the subject of being asked to come back in to work or have you discussed with others what to do in that situation?? I'm working remote now but they're telling me I have to go back to the office with no real substantive reason
--

I have been freelancing- I usually get paid via payroll and receive a W2.  I filed for unemployment, I live in NJ & applied to both states(note sure if I will get approved in NY or NJ) and I put the last employer that I was working hours were reduced due to Covid and this past Friday, I was officially released, no active projects, all Covid related. Did I file correctly using my recent employer's info or should I have used myself?

Can you also clear up if someone is fully 1099 that they will receive benefits as well, filing all info as "self employed?" Will qualify for both Federal & state or just Federal?
--

if I work in a state I don’t live in (i.e. CA) as a contract worker and was told I can apply for unemployment by my boss... but I don’t live CA, I live in NY.  Do I apply to CA or NY?
--

Are the $1200 checks a “loan” or will it reduce my tax refund next year?
--

I wanted to learn more about how the federal loans are being paid off. I thought it was just a forbearance.

--

Hi there! I have a question/need advice on my student loan situation that I was hoping you could answer at your IG live today... I have $4500 left and I applied for student loan forgiveness because my school (DeVry) made false claims and a lawsuit was settled back in 2018. In December, my application was finally added to the queue for review-yes it took 2 years for that. So it's been in administrative forbearance since then and I only paid interest on it in January and February. My question is: should I pay it off or wait to hear back to see if it'll be forgiven partially or wholly? I have about $1500 in other debt that I should be done with by end of June.

Thank you for your time and ALL that you do for us. I have been a fan for years 💜💜💜💜


Dyalekt:

Just like hot knicks and hot ticks, justice is best served on a hot plate. That one's not really right, but welcome to Brunch and Budget. The show about personal finance and racial economic inclusion with your host, Pamela Capalad, a Certified Financial Planner and a Accredited Financial Counselor here to take the bite out of your budget. Recorded live from parts unknown. It's a mystery but still recorded by the good folks at greenhouse studios. Stick em hahaha stick em. You know what I'm saying? Brunch and budget is part of the race and wealth network. I am your sound provider, Dyalekt. You can choose one, puffy is wrong. And here's your host. Pamela Capalad.

Pamela Capalad:

Hello everybody. We are live from our house I guess always now. So we started a thing we're going to be doing, w e're going to be doing our po dcast l ive on Instagram Live every single week. Starting this week, we're actually doing brunches and budgets. We 're l ike making food. We made pizza. We're making food and we're talking about money. It's actually happening live. So if you wa nt t o c atch us on IG live, we are going to be doing that every Friday at 2:00 PM Eastern time. We're also going to be doing Q a n d A interspersed throughout our podcast episodes. You'll hear the questions here and feel free to ask any questions either via Instagram DM, shoot us an email, letsbrunch@b runchandbudget.com a nd yeah, we hope you enjoy this first IG live with all of our technical difficulties and we wish we co uld h a ve s hared this pizza with you. It's damn good.

Dyalekt:

Like I w as s aying about loopholes, loopholes a re those things that they use kill you. Behind those s tonewalls in those tiny little crosses, those would be arrows piercing through anybody who would dare w alk by your property. Loopholes are the ways that rich would protect their money. Loopholes are not a good thing. Okay, well that's good to know. So the next thing is that student loans, federal student loans are suspended until October, 2020, which means that, Hey, guess what? You don't have to pay your federal student loans until October, 2020 they're paying the interest for you. They're making the payment for you. Everything is being counted towards public service, loan forgiveness or any loan forgiveness program, and that is a huge thing. So it does sound too good to be true.

Pamela Capalad:

It does sound too good to be true, but it's true. I know, right? That's one of the weird things. So we wanted to start in terms of talking about loopholes is the stimulus check. Yes.

Dyalekt:

The stimulus check which first of all, in case you guys don't know about this, this isn't the only time that we've gotten a stimulus check for this kind of stuff.

Pamela Capalad:

Oh my God. The recession of 2008 and 2009 we got two stimulus checks. We got one stimulus check in 2008 for $600 and we got another stimulus check in 2009 for $400. Stimulus checks are not new. They are not the beginning of anything new. They're not revolutionary. This is the way that governments say, hold on. Okay everybody, we're going to give you some money to get this time while we go and bail out big corporations.

Dyalekt:

And by the way, it's only a check right now because old people still want you to think that checks are a thing. It's not really a check. The reason why it's called an advance is because it's a tax credit. It's a tax credit that they're giving you the cash right now as an advance on the tax credit that you w ould be receiving. The last few times we got a stimulus check, it was actually a tax credit. That also happened in 2002 after 9/11 h appened where we got a stimulus check. But y'all didn't know that because it was in our tax credit.

Pamela Capalad:

It was just baked into your regular tax refund. You just got a little bit more money. In 2008 a nd 2009 it was baked into your paychecks and may not have noticed it either and this time they actually sent the money to your bank accounts. Now, this is where the big l oophole happened is really these stimulus checks, technically the treasury department did not protect them from private debt collectors and banks are private debt collectors. So banks were technically allowed to take your stimulus checks if you owed money to that bank. It's crazy. And this happened. A military family who had a bank account with USAA, t hat he closed it because of fraud. USAA had on record a debt of theirs and they took their $3,400 stimulus check.

Dyalekt:

Mind you she just mentioned that the debt was because of fraud and that's USAA, which exists to serve military families. And if anybody needs extenuating circumstances, right? Yup .

Pamela Capalad:

For real, for real. So USAA went back and returned the money because Twitter and the rest of the world was very angry. But a lot of Twitter people were very, very angry that they did this. And the thing is with USA , with all of these banks , they're going to see what they can get away with honestly. And it was, it was the public, it was us saying, USAA, you suck, I can't believe you did that. But truly every bank has the ability to take and seize your stimulus check if you technically owe money, even if the bank account was closed. So what ended up happening with this military couple was they had closed this bank because of fraud, but the direct deposit information was from two years tax returns ago, which is where the money was originally going. And that's how it ended up there. The system makes no sense. They just don't make money for you. Yes, there you go. There you go. So the other giant loophole, so you know, the stimulus check is capped. You, didn't qualify if you made more than $75,000. Right? We mentioned that. And if you were a married couple, you don't qualify if you make more than $150,000 . Right? So people who really need it is what the intention of the similar check was for. Now. There was another loophole in the cares act, a little known loophole. I don't know, I just found out about it myself. There's this weird thing that if you are a wealthy person and y ou basically make business income and investment income and you also take business losses. So let's say you made a million dollars a year in business income, but the business actually lost one point $1.5 million, right? So y ou're negative $500,000. You g et $500,000 of business losses, then you could actually take those business losses and deduct them against any investment income you m ade. So any capital gains you made, a nytime you sold a stock and made money on it.

Dyalekt:

Well, let's back up and explain this a little bit further. So when it comes to business losses and being able to write stuff off, I'm a freelancer and I remember I was always told like, okay, write off like your costume, cell phone , home office, all that stuff, all that stuff. But the big thing I always remember is you can't deduct more than you make . Like, so if I threw some theater shows and to make some music and all that and I made like $20,000 total for a year, a day , but I spent like 25,000 because now stuff is promotions and all that. I can't deduct that last 5,000 because I said that's more than last .

Pamela Capalad:

Unless you make investment income as well. If you sold stock at a gain but you had business losses then you're actually allowed to deduct against those capital gains. So if you have investment money, if you have investment income you can do that.

Dyalekt:

Which is weird cause like that feels like it's , it doesn't fit in with the thing cause it's like wait , I made my album, I need 20 grand or whatever and then a 20 grand in losses, that that's all fine. But then I invested in some whole other stuff that has nothing to do with it and I can still deduct it?

Pamela Capalad:

That's a pretty big loophole. And the tax cuts and jobs act actually limited that loophole. So before you could adopt an unlimited out of business losses against capital gains. So like if you lost a million dollars in your business, but you made a million dollars in the stock market, you effectively pay no taxes. So this is the tax cuts and jobs act in 2017 actually limited it to $500,000. The cap os $500 ,000 so if you have more than $500,000 of business losses, then that's the max you can deduct against capital gains. But the cares act, this is not just the care side , the taxes and jobs act limited it and the cares act took away that limit again. And so what that means is that all these rich people who weren't able to take all those deductions are all of a sudden now able to take this huge business loss deduction and they're allowed to go back to 2018 and 2019 and amend those tax returns.

Dyalekt:

Explain what you mean by amend those tax returns.

Pamela Capalad:

It means they're allowed to go back and redo their tax returns and take these deductions that they weren't allowed to take before.

Dyalekt:

So they're going to take money from money they already paid into tax stuff and then take it out and just take it back.

Pamela Capalad:

And on average, they're estimating that rich people who qualify for this, let me guess , it's going to be slightly more than $1,200 one point $1.7 million on average. They're going to get total, like everybody's going to get each person on average.

Dyalekt:

So those of us making under 500 grand. Uh , actually it has to be under 150 grand as a family or 112 even more like smaller. Mine's $400 $2,400 total. Or you know , 75 grand as a person gets you $1,200 and if you make more than 500 there are provisions in there to make you $1.7 million.

Pamela Capalad:

If you took more than $500,000 in business losses. So it doesn't matter what your income was at all. Now I was 1.7 million. You could potentially get a tax credit back, of an average of $1.7 million.

Dyalekt:

In the Jewish community that that's what they call a bacon cheeseburger with a shrimp on your fries , not kosher. It's not kosher.

Pamela Capalad:

So that is one of the big cares act loopholes . I think we need to go to a song Dyalekt. We'll l ook a t the baby.

Dyalekt:

Let's answer some questions. The questions that were pre asked. For those of you guys who are just joining us, I see the other questions being brought in. Please continue to ask questions. We will answer them during the s ong. By the wa y, y' all. If we're a little shaky cam, stuff happens. So we're going to Portland, Oregon for Fontane PDX with, I'm trying, where am I? Stimulus ch eck.

Song Break:

Little mama had asked her what she is . Sweet tea shaped , but I don't think gains with the thing . [inaudible] [inaudible] [inaudible] Boston house . [inaudible] bought a bottle of tequila. [inaudible] go to sleep at night. I'm praying for my cousin, hoping them to scholarship. That's what they offer . Nothing . [inaudible] [inaudible] [inaudible] Oh, phase three , cocaine, better not cough in my face..

Pamela Capalad:

Where's our stimulus check? We had some questions previously that people asked. Um, one of them, I think this is a great question. Did anyone bring up the subject of being asked to come back to work or have you discussed what others do in this situation? I'm working remotely now and they're telling me I have to go back to the office with no substantive reason. Okay, let's address this question because this is, this is a tough one. So basically the question is saying, my job is telling me I have to go back to the office, risk my life and for no reason, even though I can technically work remotely, what do I do? Right? So this is really tricky. So here's the thing. Technically, to qualify for unemployment, you have to get fired. You cannot quit. You can not leave your job. You have to get fired from your job to qualify for unemployment. So if you're in a situation where you really don't want to go into work or you're concerned that it's going to risk your health, see what happens when you refuse. If they keep you on and say fine you can work remotely, then you get to keep your job. If they instead say you're going to get fired, if you do leave your job, then if you do get fired, you can apply for unemployment. Yeah . That's so shitty. I t s houldn't.

Dyalekt:

And the unions use a tactic that's known as the work slowdown and some of you guys may have heard it before and they're like, what's that mean ? Like , so this is the whole point of a work slowdown is that you are not valuing the things that I'm doing. I will come up and show up and do all the things that are required of me, but only those things. And if you think that that's good enough, then that is on you to fire me. Yeah . So basically putting them in that kind of position of like, do something with me where I can work from home and do something saver or hire me . Yeah.

Pamela Capalad:

Yeah, but do not quit because otherwise you will not be eligible for employment . That's the big thing. All right . The next question we have, I have been freelancing and usually get paid via payroll and receive a W2. I filed for unemployment. I live in New Jersey and applied to both States. I'm not sure if I would get approved in New York or New Jersey. This is another question that we have. I put in the last employer that I was working hours that w ere reduced due to Covid this past Friday. I was officially released. No active projects, all Covid related. Did I file correctly as i n my most recent e mployers info or should I have used myself? So if you were W2, you always use your e mployers info. It's also way easier to qualify for unemployment if you have an employer and you w ere W2. So always, always, always. I f y ou're a W2 even if y ou're working on a temporary basis or contract work basis, if you run payroll, you always list your employer if you have other work outside of it. U m, then I would start with your employer because the thing is y ou, you need to only qualify for $1 of state benefits to be to qualify for that extra $600. Ye ah, any lo ss i ncome is l o ss o f i ncome. So I would start with applying for your employer first. And then can you also clear up if someone is fully 10 99 that they will receive benefits as well, filing info, self-employed, will you qualify for both state and federal or j ust federal? So right now you qualify for both state and federal an d s e lf e mployed person. Not every state has the self-employed checkbox actually set up. Honestly, California just set theirs upvearlier this week and New York has their set up a couple of weeks ago. But really right now if you're self employed you should qualify for state and federal benefits.

Dyalekt:

I want to answer a question that we have in the chat and then go back into things we're doing. So from poetry as a weapon. Thank you for asking this. I'm a citizen and have two children who are citizens that our marriage is someone who only has an ITIN number and my children were disqualified for the stimulus check. Yeah. Less of a question then a statement, but like I feel you . Yes . So let's wrap that thing . We can do about that right now. Yeah, that's, that sucks.

Pamela Capalad:

There's nothing we can do about that right now. I'm so sorry.

Dyalekt:

Yeah. One of the things about when we talk about the systems and things that aren't made for us is that they have graded and so it's a lot harder for everyone who isn't already rich. Yeah. Thank you for sharing that poetry as a weapon. Really appreciate you. I hope you're using t hat weapon on as many open mics as possible right now. Yes,

Pamela Capalad:

All right , so let's talk about more loopholes. Everybody. The PPP loans, the paycheck protection program, loans, they sounded so idyllic and so wonderful, right? Anyone can apply. If you're a business owner, that's 500 people at last . That's wonderful. Independent contractors and self employed people also qualified for PPP loans . So not only could you apply for unemployment as a self employed person, but you could also qualify for the paycheck protection program loan. The problem is that while the SBA is the one administering the money, the banks are the ones that are collecting applications and approving the loans . And so what ended up happening was all of these major banks were like, Hey giant corporations that have 500 employees or less, let's put your applications through first . And so the first round of PPP money ran out in less than two weeks. Yeah . So I don't know if you saw the new shake shack qualified, the Lakers qualified cause the Lakers, I looked this up, the Lakers only have 300 employees. They make $4 billion a year, but they only have 300 employees. So they're a small business.

Dyalekt:

Well, this is why the whole concept of contractors versus employees is nonsense. And people love using this to basically skirt the idea of having to take care of people. This is the whole Uber thing. This is the whole Lyft thing. This is most of the gig economy. Funny enough , a lot of this comes from sports. The reason why you see fewer complaints is because they have the unions. Yes.

Speaker 2:

So with the PPP loans, they did put through another round of funding. They put through another $310 billion . They put in stipulations that are not allowing corporations who are publicly traded to access the money. Um , the reason why restaurants like shake shack and other publicly traded restaurants were able to do this was because there was another weird loophole in the cares act and the PPP loans that actually said if you're a restaurant location had 500 employees or less, then you would be allowed to apply for the PPP loan. There was this weird unfortunate loophole that allowed huge corporations to get this money

Dyalekt:

Well and to also lay off workers because it was supposed to be a thing where you got the loan because you weren't laying off workers. And because you could have workers in one location get laid off and workers in the other location apply for the money. Same company got the same,

Pamela Capalad:

yeah, I know. It's so upsetting. So upsetting. So the next thing is we have the PPP loans coming through now. One of the stats that we saw is that 90% of business owned by POC and women were not getting PPP funding. That was what's happening in the first round. And one of the main reasons why, because these PPP loans are being administered by banks, what they found is most minority owned businesses did not have a commercial banking relationship that had SBA loan approval. My bank, the bank that I bank with, the bank that I bank with where for 4 years? Yeah , like amalgamated bank, who I banked with her for 4 years. I love them. But they do not administer SBA loans. And the other thing that was happening with the existing banks who do is they were not taking applications from new customers. They were only taking applications from existing customers. So I had to search high and low to find a bank that was taking PPP applications from new customers.

Dyalekt:

Yeah. I mean one of my least favorite things is we were hearing from other folks is that people who had loans with banks and finished paying them off just this year couldn't get a loan from them cause they're like, yay , you're a customer this year, but you're a former customer now so you don't count. They got all your info on file. They could do it just as easily. But no.

Pamela Capalad:

No, we're good. And also again, they prioritize those $10 million loans. Cause that was the max you could take because banks are making money off of every single one of these PPP loan transactions. Right. And so would you rather as a bank process , one $10 million loan or even, or a hundred hundred thousand dollar loans even, right? Yeah. Yeah. For real. So that was the big, big, big, big loophole when it came to PPP. Hopefully we're seeing new stuff, but I don't know what's going on with it. Yeah, that is what's going on with it. I know the baby's so cute. Thank you.

Dyalekt:

He's got , he is loving being here with y'all. He misses being around people. He's just coming to our live workshops . Have y'all been the live workshops with us? You know that he's a big part of the stuff that we do and he's just as upset as us about all of this PPP stuff .

Pamela Capalad:

It's okay Gani. So shall we answer more questions? I guess

Dyalekt:

Let's answer some more questions. I want to go back. So I was looking through for some music, and I forgot that there is a music group, a really dope music group called PPP or Triple P. Oh , it's a good PPP . YGE from slum village. The producer used to make beats for those cats. He knows those guys. And his side kicks a Sadiq. They were a crew about 10 years ago. They dropped a record called well as PPP and they've got a song called American pimp, which I think is very apropos for what's going on. So we're going to play American pimp,

Song Break:

the one managing your money, making the scraping pennies just to feed your family and everything. Right.

Pamela Capalad:

Yes. Okay , so another unemployment question. I work in a state that I don't live in i.e., California as a contract worker and was told that I could apply for unemployment by my boss. He was based in California, but I don't live in California. I live in New York. So do I apply in California or in New York? Now this is a super tricky question. Technically you're supposed to apply at the place that your employer is because they're the ones that have been paying the unemployment insurance to actually qualify you for this. Now, the tricky part about this as if you were a self employed for them, what's the answer? Right. And it's gray. So I would start with the state that you actually did the work in. And what we've seen is that sometimes they kick it back and say, no, no, no, no, no. Don't apply with us. Apply with the state that you live in. So it's really just apply for one and then see what they say. And then if they say, Oh, you're not, your address is not in California, then go ahead and apply in the state that you live in.

Dyalekt:

This might be a little bit annoying of an answer, but when it comes to all of these things, this is what we've been seeing. Apply for everything possible. If you think that you're not necessarily eligible for it, but you do need it, please apply for it still. There may be some reason or regulation that they haven't explained why you can fit in and can get it and or also someone might just be like, Oh wait, folks just need this. Just shut up and give it to them for real one .

Pamela Capalad:

One thing that I've been saying this whole time is legislation was passed. This was a big emergency act, but no infrastructure was passed or implemented to actually go along with it. So the big problem with all of this stuff is 30 million people applied for unemployment in the last six weeks, right? The PPP loan and was admitted there was $325 billion that needed to be administered by the SBA. The SBA in non-emergency times administers about $25 billion of loans a year. So this was a huge, huge emergency infrastructure need and they did not actually put in any infrastructure in place to do it. I keep asking like, Hey, so people aren't employed and the unemployment office has too much work to do, why don't they hire some unemployed people to process these unemployment applications? Like there's no resources, there's no money, there's no money put towards the infrastructure to actually make this happen. And this is why it's a mess to be a little bit fare .

Dyalekt:

A little bit of money was put towards infrastructure. We have seen some stuff, but like very like it's like 10 bucks .

Pamela Capalad:

It's very little. It's very, very little. Okay, so the next question, and I like brought this up earlier, are these $1,200 stimulus checks alone or will it reduce a loan or will it reduce my tax refund next year? So there was this video going around, huge misconception that the cares act, stimulus check was actually an advance on existing tax refunds.

Dyalekt:

Well, the word advanced makes you think of a loan, especially if you're worried about like music industry contracts and how you're getting advanced or book contract. You're getting advanced , you have to pay it back. Yeah, exactly.

Pamela Capalad:

But the thing with this stimulus check is it's an advance on a new tax credit. So this $1,200 that you got is basically something you would have had to wait to get in 2021 but because the government was like, Oh, you need this money now they're like, alright , we'll give you the money now and you just don't get it in 2021 but your regular tax refund, whatever you would normally get is still in tap . This is not a loan is not going to reduce anything you would have gotten before the $1,200 is extra no matter what. The other thing about the $1,200 is if you made too much money in 2018 and 2019 but your income dropped in 2020 then you also get that tax credit. But you still have to wait until 2021 when you file your taxes. So it's a little tricky in that way too.

Dyalekt:

Well, for those folks, it's not in advance. You're just getting it on time. You're just getting it on time. Exactly. You're not getting it ahead of time. You have time for one more question. That's do it. Okay.

Pamela Capalad:

So I wanted to learn more about the federal loans , uh , about how the federal loans are being paid off. I thought it was just forbearance. So you mentioned this earlier and I just want to repeat it again because it bears repeating. This may sound too good to be true, but the government is paying your federal student loans for the next six months from April through September. What that means is your next payment due date on your federal loan website should not show anything before October, 2020. It is huge. That is money in the bank. That is money that you should bank and put in your savings account. I do not recommend using it to pay down more student loan debt or your current student loan debt, but government is straight up making those payments for you. No interest is accruing. The payments are counting towards loan forgiveness programs. It's basically free money. It's one of the really big acts that happened in the cares act.

Dyalekt:

For those of you who still have the inclination, need and desire to pay down your debt to get rid of the thing. Remember the thing we just said a minute ago that banks were not helping out people who had already closed out their loans. They don't necessarily want you to do that.

Pamela Capalad:

Honestly, at this point, who knows what's going to happen with these student loans, right? They said this could never happen. Oh no, we can't pay for your student loans. We can't cancel your student loan debt. They literally just cancelle our student loan debt for six months y'all. So we don't know what's going to happen with these federal student loans. Our general advice or our general tip, I'd say we can't call it advice, but our general tip is that the student loan money that you're saving should go into savings and not go towards paying down student loan debt. If at six months you have all that money saved and you're like, Oh I just want to pay this down, take that chunk of money and pay down.

Dyalekt:

Maybe wait until your 6 months away and you're like, Oh I want to be done now. Do that and then be done. Then hold onto the money so that you have it liquid, have the flexibility and you can do stuff in case stuff happens cause I don't know if you know but stuff happens. Yeah .

Pamela Capalad:

The reason why we're saying this is because it's been six ish weeks since we've had the lockdown every single week. More and more people are applying for unemployment every single week. More and more people are losing their jobs.

Dyalekt:

Well every single week things are changing in terms of what we look at in terms of economics. I mean right now the reason that people are saying, Oh you can do the student loans is cause we were like we set these prices, they're high prices but it's worth it. It's education, yada yada. And then Wu Tang put out an album that they charged over a million dollars for, for like one copy when usually like I remember a rap CD was 10, $20 at best. So if you can go from $20 to a million, then maybe you can go from 300 grand to go to a school to like 20 bucks for that. So let's wait and see.

Pamela Capalad:

Let's wait and see with all of this stuff. Let's wait and see. Alright , let's go back to the loopholes. Okay. So let's talk about these corporate bailouts y'all, because these are big. These are really big corporate bailouts. They were, so just to give you some scale, the uh, the SBA loans, the PPP loans and the EIDLs, the economic injury disaster loans. If you were someone who was applying for those, I mentioned earlier that that $350 billion was allocated towards that. It was a lot of money, right? But it went really fast. The corporate bailouts , um , by poetry as a weapon. Thanks for watching. Thanks so much.

Dyalekt:

Um , I wanted to mention about the EIDL because I just got a text that a pockets change. The uh , hip hop and financial organization, we worked with kids just got some money from the EIDL. We got a thousand dollars.

Pamela Capalad:

Yes. Oh yes. If you did apply for the economic injury disaster loan, what they ended up deciding was instead of making them loans, those up to $ 10,000 advances actually ended up being a thousand dollars per employee. So if you applied as a self employed person, y ou got at least a thousand dollars. So that's great. I guess it's something.

Dyalekt:

I just want to give that in contrast to the amount that folks are getting out through the bailout.

Pamela Capalad:

Oh yes . So there were $500 billion in corporate bailouts. $50 billion went to the airline industry and the cruise industry, I believe, some kind of travel bailout. So 50 billion . So there are $450 billion left for the rest of these giant corporations and giant corporations . The definition of that is more than 500 employees. I know. So $450 billion. That's a lot of fricking money, right? Here's the loophole. There's actually more money in there then it seems. Because the treasury department is backing every single dollar of that $450 billion, they're using the federal reserve to administer these corporate bailout loans. And what that means is the federal reserve i s like, yo, treasury money is actually really safe. So what we're g oing t o do is for every dollar that treasury gives us, we're going to leverage it up to 10 times per dollar, which means that this federal reserve, this, which means that this corporate bailout is not worth $ 450 b illion. It's worth four point $5 trillion.

Dyalekt:

So I'm over here cooking. You're with here with the pizza. I'm showing you guys what we got going on with the pizza. I'm spreading some garlic onto the cross that we have premade. Uh , I'm a big proponent as cooking stuff is to never do stuff like a hundred percent from scratch. So the thing I wanted to ask about the bailouts Pam, is why do they need bailouts? Cause I remember, I remember when I had a bank account go negative, you're right. And I was like, Hey bank account, I don't have no more money. And they were like, Oh really? You don't have enough money to pay off the money and you'll bail out . Right. They charged me more money.

Pamela Capalad:

Oh what?

Dyalekt:

So why do the banks need b ailouts?

Pamela Capalad:

Well you remember in 2008 you remember in 2008 some of these places were deemed too big to fail. Do you remember that phrase too big to fail and what that means and why the fed is infusing so much money into our government or into our, into our economies because they are worried that the economy will collapse. And when they say economy, I'm pretty sure they kind of just mean the stock market. And I'm pretty sure they kind of just mean rich people's money.

Dyalekt:

Well cause that's the thing like about the too big to fail, right? It's like the whole point of capitalism is that you either do good or you fail and there is no problem with you failing because if you fail, someone else would take your place cause you already had a competitor.

Pamela Capalad:

Well, and that's what happened in 2008 with Lehman brothers is Lehman brothers was deemed not too big to fail. So they went bankrupt and then Barclays bank bought them. So that's kind of what happened. A lot of, a lot of very little banks that didn't do well, that were not deemed too big to fail got bought out by a lot of banks that were too big to fail actually.

Dyalekt:

So if banks are too big to fail, then does that mean that capitalism isn't and that maybe it doesn't work? I didn't mean to get that heavy on you. Let's go back to the pizza . Let's go back to the picture . We've got a lovely Muir Glen. Uh , we are not getting sponsored by them, but it's a good brand. Sauce, no sugar added, just the sugars t hat's already inherent. Your sweet enough, the pizza. And we're just g oing t o throw on some cheeses. Oh yeah.

Pamela Capalad:

So the thing about these corporate bailouts that's really scary is putting $4.5 trillion into the economy or whatever they're going to do with it means that we may see a rash of inflation.

Dyalekt:

Yeah. Tell me about the inflation thing. Why ? Why does putting money into the economy cause inflation? It feels like it would do the opposite, right? Putting money in the economy makes the economy better.

Pamela Capalad:

Well, it makes a lot more money circulating in the economy, that's for sure.

Dyalekt:

It's like cheating your way to capitalism, right? You're like, I just put more money in that . I played monopoly. I've seen the person who's the banker cheat and put more money in their thing. You just win. Right.

Pamela Capalad:

Maybe? That's the thing that's super tricky about this is we really don't know what this is going to look like and what it's going to do to the inflation rate in the economy. What inflation means though, is that if there's too much money circulating in the United States economy, then the value of your dollar, your ability to buy stuff is going to go down. So that carton of milk that actually only costs $4.50 now, may end up costing $9 at some point. If inflation gets super crazy, the value of every single one of your dollars goes down if there's too much, too many dollars in the economy.

Dyalekt:

Yeah, and I want to explain about how it's not about the milk costing more. That's like the tough thing, right? Is that things like the milk costing more. It's not, the milk costs me more is that your dollar means less than it meant before because there's more of them . It's again about scarcity and abundance. If it's not that rare, it's not that hot. Same thing with your dollar.

Pamela Capalad:

Yes, the milk is still the milk, but the how far your dollar will go to be able to buy that milk is so, so, so much less so. That's what the big concern is right now. The fed is basically said, we're going to provide an unlimited amount of money and we're going to keep the interest rate at 0% so let's see how these corporations bounce back. Now mind you, these corporations are currently laying people off. They're currently not putting money out. The fed rate right now is 0% . They're currently laying people off. They're currently not putting money back into the economy right now. They are not stimulating anything really. But guess what the stock market's doing Okay. Yay . The Dow was at a low of 19,000. I believe at the end of March ish, and it's bounced back to 23,000. So I guess the stock market's doing okay. I don't know.

Dyalekt:

Well, that's interesting. So what that explains is that there are two kinds of economies. There's the economy for investors and there's the economy for laborers. If you get your money from working, like you have to do a thing for someone to give you your cash, then none of this is helping you out at all. And in fact, it's probably making things worse because you're giving more power to the people who pay your salary and now they feel like they maybe don't have to because they got other options.

Pamela Capalad:

Well, as you heard earlier, a lot of rich people make most of their wealth from these capital gains, right? Make most of the wealth from their money making money, and I want to debunk something. I don't want you to think that that means you should start investing or that means, I don't want you to think that means that you need to start investing in the stock market because right now it's super volatile and the people who are really making money off of it are the people who already had a bunch of money in the first place. Please do not put your stimulus check into the stock market if that was not your plan. Please don't put any extra money into the stock market right now. It's really one of those places where right now we don't know what's going to happen.

Dyalekt:

Yeah. Well, you know, you always say how the stock market exists to build what? Not to build wealth, but to maintain wealth. If you still need to build wealth, use other ways to do that. If you're still just hungry like us, make a pizza.

Pamela Capalad:

And I would love to answer, we have one more question.

Dyalekt:

By the way , our last bought swine. I know a lot of folks who work at meat processing places. W e've been hearing about the health conditions and stuff like that. And that's another temporary thing that we've decided that we're going to do is I think we're g onna stop buying meat from folks to look out for people. People often ask the stuff that we can do to help each other out. And while we're looking for lots of help from our government because i t's the government, with each other, small, small gestures do a lot, they're really worth everything.

Pamela Capalad:

They really are. They really are. So let's go to our final song dialect. While we answer this final question, I have some final words about what loopholes you can take advantage of right now. Yeah . So we're going to Crystal Minnesota. I don't even know exactly where that is. In Minnesota for a cat named Formative, who's got a song called land of the loopholes.

Song Break:

Hello , you need me? I retired though. I 'll call you back. Tough decision but. I'm from the land of the loopholes in to m ore about what th ey d ownforce system sp ace. Th e s tate of distortion [i naudible] i deas from a t w o o rphans in Erdogan, the murder wh ere t h e s c ores a s sortment b ut instead of blaze, now they carry tasers and pepper sp ray. So t h e n e tbook l i ke a t t he br ief w h ere t hey creep into seven St ates, but an y l a tency t h at y o u g o t t he first la nd d efense ti cket, deep breath. We ll y ou have the second fe nce y ou think is g etting a t aste, bu t I ' ve b e en d o ing t h is s ince I got my si blings t o take them. I g et the presence to identify ge t G r aebel. I' m c l imbing d own the fe nce. I can't decide if Trump ap prentice w h o I 'm trying to get next to b a by g o vernment l e ss t h an e mpty to th reat, but I ca me t o f u ll w i tness. Th ere's m a king t o take a second trip or ma ke m e , th ere'll b e stressed up being friendly. You sta rt to kill prison and st uff like that. Wit h Ni k ki, I 'm coming for you . I won't ignore you. We' re ki nd of spi t dr op. It says long before I d e ploy it an d it's obvious your dominance is ca using the ap ocalypse. But I'm not a lawyer. I'm a devil des troyed. Y ou want my radar? The order set in stone. Once I hit the space bar, I know I'm not as though they follow like a pla ce ca l led th e la t est st rike like a Jaguar plu ses do w n th e window with the be autiful sta ge an d encounter eight special agents. But remember my tra in ma de him la t e qu i te ne a rly wi thout one shot by ye t , b ut set up the alarm because they got the ro om wired. Are yo u tired? Cau se I' m not. I'm trying to set th e seven heads of a CUS A ne ver get used to the du c es [i n audible] th at desperate on level headed fin ish to wh e n th ese, not th at we go t this thing and sa y yo u r wh ite leg isn't this ski nny Su preme because they lack self esteem. So they think they gotta pick up this down with them, but bring your biggest injustices by mission. Perfect timing. I found the power source. Cut it out. The cost of short promise unconscious that I would not aboard and now I'm on the bottom floor. Four more floors to that bolt or a score. That devil is trying to burrow diverse core . I'm coming for you . I won't ignore you . We're kind of spit drop. It says long before I deploy it and it's obvious your dominance caused the apocalypse, but I'm not a lawyer. I'm a devil . Destroy there . You want my radar, the order set in stone. Once I hit the space bar, I know I'm not other than they follow like a place called latest strike, like a Jaguar front door stuck in no room for the mirrors and reflections shows up. Pose ready for was no fear. The members were to wait. Somebody must have had that age to hit the switch. Now I know this ends today. It's a rabid three 60 degrees by the most elite of my enemies. This place is trying to act off [inaudible] even though the atmosphere was ominous sessions as we argue about Mendez. No, but we're not in a pod there . Just so you know the rhinos happened. It's my intention to obvious like those work back when the executive orders were just the orange nerves that went . Ben is abandoned. Malani fled to Somalia and photography. Danny still she's not with you . The apocalypse stopped to your soft complicates so written out Trump, press the self destruct. Fucking yourself to pull the car from business. Suffolk is collapsed and lost consciousness. I heard her countdown start 10 seconds till they did park . I'm going to work with on that divorce. Make sure they don't get smart like no one tells you you can't make a change with park played the part.

Pamela Capalad:

Let's go to our last question. Hi there. Oh, there you go. I have a question and need advice on my student loan situation that I was hoping you could answer your IG live today. I have $4,500 left and I applied for student loan forgiveness because my school made false claims and a lawsuit was settled back in 2018 whooo, goes back, back, back. In December my application was finally added to the queue for review. Yes. It took two years for that because our system sucks. It took two years for that. So it's been on administrative , forbearance and I only paid interest on it in January and February. My question is should I pay it off or wait to hear back to see if I've been forgiven partially or wholly. I have about another $1,500 in debt that I should be done with by the end of June. Thank you for all your time and all that you do for us. I've been a fan for years. Oh thank you.

Dyalekt:

No, no , actually say that last part because we never say that.

Pamela Capalad:

Oh yes, thank you for your time and all that you do for us. I've been a fan for years. Heart, heart, heart, emoji.

Dyalekt:

We want to shout that out cause we're really bad at taking compliments and I think a lot of folks are, and these days, one of the things we gotta remember is that we do love each other and have each other's backs. And let's not wait until it's too late to say that. So we really appreciate y'all for saying that. Thank you.

Pamela Capalad:

And to answer your question, I would wait and see what the lawsuit says because the thing is that if the schools made false claims, technically those loans should be discharged. One of the few situations where student loans are discharged is if the school goes bankrupt or if the school made false claims in terms of what your degree is, so I highly, highly, highly, highly recommend waiting to see what happens before you put any more money into the student loan and that's that. And especially if it's a federal student loan, you should not be earning interest right now or it should not be accruing interest right now and you should not be having to make payments anyway, so I would wait and see what happens, especially because it's been two years already.

Dyalekt:

And we're going to do a little bit of business before we go into our final stuff that we want to talk about today. If you guys are listening and you're digging the stuff that we got going on, we're going to be doing this every Friday at 2:00 PM Eastern time. We're going to be doing this live. We're going to be answering all the questions that you have, so please feel free to reach out to us. You can reach out on the Instagram, you can reach out to us through our email list or if you are following us on Facebook or Twitter or any other social media, DMS are fine in any of those places. We'll reach them, find them and get these questions answered. If you feel the need to express, I want to announce that I'm going to be partnering with the Bowery poetry on May 11th I'm going to be hosting our first open jam session. If you are a singer, MC , instrumentalist, DJ, painter, sculptor, dancer, please come get down and jam with us and the Bowery poetry club. If you from New York had been in New York, you know it's a really dope thing with lots of things going on. A mole Brown had a lot of great content going on this stuff every day. Also, I want to shout out , I got my favorite MCs on my friends or my jam. If you just want to rap . It was spoken in the freestyle Mondays . Crew had that going on. There's a lot of good stuff that's happening. We're going to be continuing to do workshops, zooms and meetings for the people who are already clients with bunch of budget and see change. But also if you have the need for your group or your organization for us to come and talk to y'all, please holler.

Pamela Capalad:

Yeah, we're here. We're here for that. Uh , good housekeeping. I love it. Okay. I always forget to do that.

Dyalekt:

I see another question, another question before we get to the yes,

Pamela Capalad:

Jesse Rose nine. What about credit card debt? If you're enrolled in their relief program, does it make sense to pay it down during this time? So if you're enrolled in the relief program for credit card debt and they're not having you accrue interest and your payments are positive, or of they are reduced, I would actually not pay it down during this time. And the reason why is because , if your credit card debt is paused , we want you to, as much as possible, save as much as possible. What you can do is save that money. If you end up needing it during this time, then you have it. If you ended up not needing it during this time, then at the end of whatever the deferral program period is, just pay that big chunk down and it's , it's like you've lost no money anyway. So the reason why we're telling people to pause their credit card debt or get on relief programs or things like that is because we want you to accumulate as big savings cushion as possible over these next couple of months. And if you end up not needing to use that savings cushion , awesome. That's great. Use it to pay down the debt that you were going to do anyway. But for now we want you to have that cash because you can't get that money back when you put it down on the credit card. Please keep your money, keep your access to money, keep your flexibility. It's so important. Yes. And one of the great things that the cares I've actually did do with this deferral program is if you do, if you are a part of deferral program with the credit card company, then the credit card company is not allowed to put any delinquent marks on your credit report for the next 120 days.

Dyalekt:

If you see them dispute them.

Pamela Capalad:

Yes. If you see them dispute them. Exactly. Oh, we got a question from childish China's gamma , gamma Lira. I love it. Is there a better alternative to savings account with the fed rate continuing to go lower? Yes. So ally bank is still paying 1.5% Marcus by Goldman Sachs. And so paying 1.55% which is, which is a big drop. It used to be, well not that big. It used to be like 2% different , 1.5 yeah. Yeah. But we do recommend high yield savings accounts for sure. So Ally bank or Marcus are the ones that are paying the highest right now that we've, and honestly as the fed rates continue to drop the yield , you may see the savings rates continue to drop as well. I will say ally bank has held steady at 1.5% throughout this whole time, which I think is incredibly impressive. Um , and then glow up getting asked what is a reputable relief program? Yes. From the actual company. You got it? Yeah. So you call your credit card company directly and they put you on one of their different programs, they're relief programs and then they can not damage your credit score for the next 120 days, which is amazing.

Dyalekt:

So just to make the distinction, so are we saying that like a non reputable relief program would be maybe one from a third party company? Like when you get some debt consolidation or like I've been getting texts and emails and even robocalls where they're like, you got this thing and you have to pay down your debt and Oh here's where you must put your stimulus check. There's a lot of scams out there and that's the thing that's being brought up. So thanks for asking that . Yes, that's a great question.

Pamela Capalad:

I did not know that. Oh, another thing is that if you go to annual credit report.com instead of having to wait a year to check your credit report, you're allowed to check it every week because they can just turn that shit on apparently. But if you go to annual credit report.com you can check your credit report every week and make sure that no one is messing with your credit right now. So one big loophole that we wanted to end with is if you are a self employed person, the question that we've been getting a lot is should you apply for unemployment or should you apply for the PPP loan? And the answer to that is apply for both because here's how unemployment works. You should apply for the PPP loan because unemployment is not consecutive weeks, it's cumulative weeks. So the way that it works is if you get unemployment now and you're on unemployment, you claim it for like three weeks and then you get approved for the PPP loan. You don't claim unemployment for the weeks that you have the PPP loan, which is eight weeks, and then you can get back on unemployment if you have not found work yet. And the PPP loan money has been exhausted. So you can use both in tandem and just take turns based on which one you're using. So that's a really big one. The other thing that we want you to keep in mind is if you have lost your income and you do qualify for unemployment, you also qualify for Medicaid and you also qualify for food stamps. So a lot of people who've lost employment have also lost their health benefits. So we highly recommend applying for Medicaid or applying for some kind of health exchange and health exchange insurance and also applying for food stamps if you're in that place where you need it. Please take advantage of all of this stuff right now. These public benefits are here for situations just like this. Basically,

Dyalekt:

We're gonna finish off. If you guys have any more questions, please ask them. Hit us after the show in between. We're going to continue to do this thing. But the big point we want you guys to understand is that you matter, and that may seem like a weird thing, but we've been told we've been gas lit for years and generations that we don't, and that we're just a cog in a wheel, and that our usefulness is determined by our ability to get labor done for other people. But just remember that if we're collectively building something together, right? You know , like capitalism, this world, this country, it's supposed to be a circle, supposed to be a cipher . And if you're going to put in, make sure you get a piece of the pie too . Thanks everybody. Brunch and Budget.