Seemingly minutes after the congress passed the $2 Trillion Coronavirus stimulus bill last week, with the painstakingly-crafted acronym of CARES for its name, the efforts began to create a second stimulus bill began. The president opened by proposing another $2 Trillion for infrastructure (as dependable as "it's for the children"). Due to the shutdown of about 40% of the economy, millions of people are suffering, but is the treatment worse than the disease?
Look at it this way. Tax revenue is going to collapse for the same reason - millions out of work. That means the Fed.gov is going to pay those hurting people with dollars made up out of thin air. That's going to ultimately hurt everyone. In the early days of the Kung Flu, I saw it referred to as the Boomer Remover because of the demographics that it hits old people the hardest - and that feeds instantly to the people who think every problem in the world is due to boomers. The financial mess that's likely to flow from this defacto adoption of Modern Monetary Theory seems likely to wipe out far more people than the virus does.
At its heart, the Federal Reserve's tricks of selling themselves debt to create $4 Trillion is the same as everyone taking a Sharpie and adding a couple of zeroes to every dollar bill they have to make them $100 bills. Neither your hundred dollar bills or the trillions the Fed creates are backed by anything and they're worth exactly what someone will give you for them. By the way - it's illegal for you to do that, but not the Fed.
Is creating $4 Trillion out of nothing, handing out some pittance to people who were living paycheck to paycheck and now have nothing, while giving millions and even billions to political favors, the smart thing to do? I mean, if they're going to create money from nothing, shouldn't there be discussion of whether it's smarter to spend it on that or spend it on something else? Like maybe improving medical infrastructure such as hospitals, clinics, equipment, education, and so on?
Let's say we save a million lives by shutting down 40% of the economy. I doubt we will, but $4 Trillion works out to be $4 Million per life saved. Is that reasonable?
In both $2 Trillion stimulus bills, they've basically pulled a list of favored groups out of Nancy Pelosi's desk drawers to get money so they can launder it and give it back to Evil Party candidates.
Nothing good ever comes out of Nancy's drawers.
Nice setup to what comes out of Nancy's drawers. I'm still laughing.ReplyDelete
Sometimes you've just gotta swing on the low-hanging, easy pitch.Delete
It was a gimme.
I think that I ought to add four zeroes to each buck, because 10K sounds a lot better to me than a hundred. Or five zeroes, now that I think about it.ReplyDelete
I have no idea what this will do to inflation. Honestly, I have no idea what 20K or 30K unemployed people will be like. Bread lines? Will stimulus 4 or stimulus 5 be called the WPA?
We're headed for the waterfall without a rudder or a paddle. Hold on as long a you can.
What's the difference? We've created $20 trillion out of nothing over the last 20 years. What's another $4 trillion?ReplyDelete
All this just hastens the inevitable collapse. The sooner it happens, the better off the survivors will be. I'm all for it.
When the house is catching fire is not the time to obsess over the cost of the fire extinguisher. After the fire is out there is still massive repair to do, and an empty fire extinguisher. And the foundation was already pretty dodgy.ReplyDelete