Stuck Between a Rock and a Hard Place
The stimulus money for Coronavirus aid is ending soon.
The CARES Act money is set to end over the weekend, July 25th, 2020.
Via Greg Iacurci writing for CNBC,
“The CARES Act, the federal coronavirus relief law enacted in March, gave an extra $600 a week in aid through July 31 to Americans receiving jobless benefits.
But, in all states, that subsidy will end this weekend — on July 25 or 26 — unless Congress passes legislation before then to extend the timeline, which looks increasingly unlikely.”[1]
The Payment Protection Program was set to expire June 30th, but was renewed at the last minute, and is set to expire on August the 8th.[2]
The stimulus programs have sent trillions of dollars of aid to families who are unemployed because of the government lockdown in response to the Coronavirus.[3]
Over half of Americans depend on taxes for their income.[4]
Considering the current scale of the riots and unrest, what would happen if just one of the programs ended?
The government is stuck between a rock and a hard place. The USA cannot afford to pay the taxes for the stimulus cheques but there would be a depression if people don’t get their stimulus money.
The government can either print money and risk hyperinflation and a Great Depression, or the US goes into a Great Depression.[5]
So they (we, the tax-payers) are going into debt, financed by the Federal Reserve printing money.[6]
“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” -Former Federal Reserve Chairman Alan Greenspan, Meet the Press, August 7, 2011.
“We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.” -Fed Chairman Alan Greenspan, US Senate Committee on Banking, Housing and Urban Affairs, Feb 16, 2005.
“Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it.” - Alan Greenspan, in an interview for the Council on Foreign Relations, Nov 2014
At least the Treasury has $1.7 trillion stored at the Federal Reserve.[7][8]
That should help for a month or two.
"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." -John Maynard Keynes, The Economic Consequences of the Peace, Chapter VI pg 236
[2]https://www.washingtonpost.com/business/2020/06/30/paycheck-protection-program/%3foutputType=amp
[3] https://www.zerohedge.com/markets/never-has-so-much-stimulus-been-injected-economy-single-quarter
[4]https://www.hamiltonmobley.com/blog/ivycva7i7sg00urep0g1jytllrsety
[5] https://www.hamiltonmobley.com/blog/interest-rates-and-inflation
[6]https://www.hamiltonmobley.com/blog/6iqjmzuipmiqrcu679jeiojtiel768
[7]https://mobile.twitter.com/lancejlewis/status/1286275971478364166
