No Socialism? White House Unveils $850 Billion Economic Package: “Sending Checks To Every Household”
Now, don’t get me wrong, there’s plenty of reason that taxpayers should be reimbursed for the money that the federal government has stolen from them and unconstitutionally spent on themselves and other programs, businesses and provided for silly and stupid unlawful studies among other things. However, I recall President Donald Trump telling the people of the united States we would never be a socialist country despite the socialism we have been involved in for years. Now, we have Treasury Secretary Steve Mnuchin looking for $850 billion to send to households in the US.
Zero Hedge reported:
Former NY Fed President Bill Dudley appeared on Bloomberg TV Tuesday morning to say that if the administration really wants to restore confidence, it should reconsider its insistence on a payroll tax holiday, and instead start firing off checks to every US household.
“I think one good idea is to actually send out checks to households” to provide support during the coronavirus outbreak, Dudley said, who added that while the Fed is doing “everything it can” to support the availability of credit, the central bank is virtually powerless to blunt the initial demand shock: Only fiscal stimulus can accomplish that.
“If that situation continues to deteriorate then I think we’ll start to see the kind of special emergency interventions that we saw in 2008.”
His comments come amid rumors that the Fed is about to intervene in the Commercial Paper market.
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With the markets screaming for more federal fiscal stimulus to help cushion what will almost certainly become an extremely deep, but potentially short-lived, recession, the administration has unleashed headlines claiming that the third economic package will include $850 billion (more than 100x the $8.3 billion included in the first package).
The headline hit earlier this morning, with a barebones report in Politico’s ‘Playbook’ newsletter, which frequently publishes administration scoops.
NEW … PLAYBOOK: MNUCHIN seeking $850 billion from Congress …
— Jake Sherman (@JakeSherman) March 17, 2020
Then, the Washington Post followed up that initial report with a lengthier story offering more details: The package would be mostly devoted to flooding the economy with cash, through a payroll tax cut or other mechanism, two of the officials said, with some $50 billion directed specifically to helping the airline industry.
Roughly 30 minutes after the Washington Post report, an administration official confirmed the story.
Mnuchin is reportedly planning to introduce the package to the Republic-controlled Senate on Tuesday, and would like to see the package pass the upper chamber of Congress by the end of the week, he told senators during a Monday evening call.
This comes after Larry Kudlow hinted at helicopter money yesterday, and Mitt Romney called for ‘Andrew Yang-style’ cash injections for every American adult.
Some $50 billion in aid directed specifically for the airlines has also been earmarked, according to Sen. Marco Rubio.
“I think the assumption’s going to be that we’re going to do something, it should be big. Because we can’t assume that we’re just going to keep coming back,” Sen. Marco Rubio (R-Fla.) said Monday night leaving a meeting with Mnuchin and other administration officials.
Rubio said aid to airlines was likely to be included. “We still need to get people around the country. I have no doubt that’s going to be a major feature of the next step.”
Earlier this month Congress approved $8.3 billion in emergency spending for public health programs, and last week the House passed a package with paid sick leave, unemployment insurance, money for food stamps, free coronavirus testing and more, the Senate made modifications to the House package over the weekend that were billed as “technical corrections” but really scaled back the sick leave section of the bill’s benefits.
With America’s screeching to a halt, the intervention may need to be faster and even more extreme than the action taken during the financial crisis. In 2008, Congress passed the now-infamous $700 billion TARP package to bail out the banks. This time around, Trump is clearly hoping to make a statement by spending $850 billion – a larger number than TARP – to bail out Main Street.
In a statement released on Tuesday by the Department of the Treasury, Mnuchin stated:
“I have just sent Chairman Jerome Powell a letter confirming that I approve the establishment of the CPFF to provide liquidity to the financial system pursuant to Section 13(3) of the Federal Reserve Act and the Board’s Regulation A. The economic disruption and uncertainty created by COVID-19 has created challenges for the commercial paper market, constraining access to short-term credit for American businesses. By providing short-term credit, the CPFF will help American businesses manage their finances through this challenging period. The CPFF will provide a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle that will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers. Specifically, the vehicle would purchase commercial paper that is currently rated A-1/P-1/F1 by a nationally recognized statistical rating organization (NRSRO) and, if rated by multiple major NRSROs, is currently rated at least A-1/P-1/F1 by two or more major NRSROs. The Federal Reserve Bank of New York (FRBNY) would charge rates and fees to eligible issuers based on collateral arrangements, indorsements, or guarantees that the FRBNY determines to be acceptable. This will support the smooth functioning of the financial markets and Treasury will provide $10 billion of capital to the CPFF from the Exchange Stabilization Fund.”
The step comes as central banks and governments around the world roll out emergency liquidity measures for markets and economic stimulus programs designed to soften the impact of the spreading coronavirus. A number of economists have said virus-triggered closures and national lock-downs are making a global recession increasingly likely.
The Fed on Sunday slashed interest rates to nearly zero, announced enhanced dollar swap lines with other central banks and said it would buy at least $700 billion in Treasuries and mortgage backed securities to ensure market functioning and keep credit flowing.
Yes, this is the way you fix everything, just toss more debt on the pile after absolutely irrational behavior concerning coronavirus, right?
Though I’m sure many out there will love to get a nice big check. They only question is, what is that money really going to cost those receiving it?
Article posted with permission from Sons of Liberty Media