Economic rescue bill — far too little and way too late. A disgrace.

The nation is in worse trouble now than before.

This deal is a disgrace.

Congress, White House reach agreement on $2 trillion coronavirus economic rescue bill
THE WEEK, Peter Weber

“Ladies and gentlemen, we are done,” White House legislative affairs director Eric Ueland said early Wednesday, after five days of intense talks with congressional leaders about a coronavirus economic rescue bill. “We have a deal.”

No need to puff up your chest, Mr. Ueland. After “five days of intense talks” a $2 trillion deal was produced, when at least $7 trillion is needed right now, and much more later.

Think about it: If you gave every single adult in America (all 200 million of them) a check for $3,000 every month for the next six months, that would come to just $3.6 trillion.

Can the Monetarily Sovereign, U.S. federal government — a government with the infinite ability to create its own sovereign currency, a government that never can run short of dollars — can that U.S. government afford it?

Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”
Warren Buffett: Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400 fold during the last of my 77-year periods. That’s 40,000%!

The $2 trillion deal includes money for most Americans, $367 billion for small businesses who continue to pay employees forced to stay home, $130 billion for hospitals, and a $500 billion loan program for corporations, states, and local governments.

Do the 30 million small businesses in America need more than $367 billion to stay alive?

What is the Definition of Small Business?
Depending on your industry, a small business could be defined as business with a maximum of 250 employees or a maximum of 1,500 employees.

That comes to about $12,000 per small business. More importantly:

Small businesses employ over 56 million people in the United States, and, according to the Small Business Administration, that is equal to 57 percent of the private sector employees in the nation.

So the $130 billion comes to only $2,321 per small business employee.  Considering FICA (an additional cost that is money coming right back to the government) plus the costs for health insurance, rent, maintenance, and the cost of lost business, many small businesses will not survive on that $2,321 per person.

As for the 6,000 hospitals in America, the $130 billion comes to $21,000 per hospital, less than the average cost of a 1-day, 1-patient stay, and clearly not enough to do whatever the federal government has in mind.

And finally, we come to the “$500 billion loan program for corporations, states, and local governments.” Is this supposed to be a joke?

First, what is $500 billion supposed to accomplish for corporations, states, and local governments? Gross domestic product is about $20 trillion. Do the politicians believe that an additional 2% will make up for the losses due to the virus?

More importantly, it’s a loan. It has to be paid back to the government. Why? What is the purpose of paying it back?

The federal government neither needs nor uses any dollars it receives. The payback dollars will be destroyed upon receipt. (A Monetarily Sovereign government destroys all income upon receipt, and creates new money when it spends.)

The U.S. federal government never should lend. Never. It only should give. There is no reason for the government to want money coming in.

The deal was negotiated by Ueland, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell (R-Ky.), and Senate Minority Leader Chuck Schumer (D-N.Y.), who was in frequent contact with House Speaker Nancy Pelosi (D-Calif.).

At the insistence of Democrats, the legislation includes an independent inspector general and an oversight board for the $500 billion loan program, as well as other protections.

The Republicans tried to slip in a provision that essentially allowed the oft-bankrupt Donald Trump, the owner of the crooked Trump University, the crooked Trump Foundation, and the hard-hit Trump hotels, to determine secretly who gets the loans and the terms.

Now, what could possibly go wrong with that?

The nation is suffering financially. Additionally, more dollars are needed for research and health care related to the virus.

The government has unlimited dollars. What is the purpose of rationing them?

Visualize a billionaire dropping a single dime into a beggar’s cup. “Here, buy yourself some food.”

Far too little, and way too late. A disgrace.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

1. Monetary Sovereignty describes money creation and destruction.
2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY