The White House has successfully brokered a deal with both the Republican and Democratic leadership of the Senate to provide a historic $2 trillion stimulus package that puts money right into the hands of American households and small businesses through direct payments and massively expanded unemployment benefits that will also apply to non-traditional “gig” workers and freelancers. This is a distinctly different policy response from the 2008 – 2009 crisis, which was mostly exploited by tycoons with government connections to the peril of American workers.
When combined with a Federal Reserve that is “all in” on pumping trillions of dollars of liquidity into the financial markets and the imminent re-opening of the American economy, it is possible Trump has truly threaded the needle and will pull us out of the worst financial crisis in American history in record time. Trump and Mnuchin are un-fucking-believable.
This is exactly what Trump needed to do to re-inflate a deflationary spiral. This was an epic and totally arbitrary destruction of demand. It must be replaced through fiscal and monetary stimulus if our economy is to survive.
This policy response, though required, will have consequences for future generations and absolutely should not have happened in the first place. But everyone should understand by now that it was not Trump’s decision-making that created this situation. State and local governments made the batshit decision to nuke their economies based on the unrealistically grim and exaggerated estimates of a single academic who is now being taken down by his peers. Trump took the necessary action to save our federation collectively despite them. And he is putting pressure on state and local policymakers to stop the bleeding, which is what he needs to be doing big-time right now. If you don’t like what’s happening to the workers and small businesses around you, light up the switchboards at your state capitol with complaints. Let your governor and mayor know that you will do everything in your power to get them voted out for destroying the economy rather than taking constructive steps to isolate and protect the vulnerable. They have been irresponsible. They have been immoral. They have been stupid. These destructive policies need to end and they need to end now.
At this point, Nancy Pelosi and her crowd could still pooh-pooh the bill and try to stall it, to not hand Trump a win or to make a last ditch effort to expand funding for the arts or Obamaphones or whatever. There’s probably some of that nonsense in the bill already because Washington’s loaded to the gills with rent-seeking assholes. But I think standing in the way of this behemoth is pretty much political suicide. Especially considering most of the US population is now familiar with Nancy’s batshit list of pork in a time of crisis. Of course, I thought trying to impeach a president months before an election with a pandemic brewing on the other side of the world would be beneath her too and I was wrong about that. She does find ways to suck at her job that continue to surprise me. And Schumer is already joining Republicans in taking a victory lap, so that’s awkward for her.
While the final terms of the bill remained under wraps early Wednesday, lawmakers had been eyeing sending one-time checks worth $1,200 to many Americans, with $500 available to children, with the assistance capped above certain income levels.
Those payments would be in addition to a broad expansion in unemployment benefits, which would be extended to nontraditional employees, including gig workers and freelancers, according to a Democratic aide familiar with the negotiations. The agreement is also set to increase current unemployment assistance by $600 a week for four months.
The Senate is also poised to approve $350 billion in loans to small businesses in an effort to keep Americans on payrolls as economic activity across the country comes to a standstill.
A major challenge in the negotiations was roughly $500 billion in corporate aid, much of which will go toward backstopping Federal Reserve loans. The Treasury Secretary will have the authority to directly lend a slice of those funds, and Democrats had sought to place controls on the money. The agreement will create a new inspector general and oversight board to oversee the aid.
Mr. Schumer wrote in a letter to Senate Democrats Wednesday morning that the legislation will also invest $150 billion in the health care system, already straining to respond to the quickly expanding number of infections across the country, and send $150 billion to state and local governments saddled with costs related to the virus. Those funding increases are among several lawmakers had intended to include in the package.
In the same letter, Mr. Schumer said the legislation included a ban on stock buybacks for any company receiving a government loan from the stimulus package. The ban lasts the term of the government assistance plus 1 year.
Frankly, I think the decision to structure aid to small businesses as loans and not grants is a bad idea. What’s killing jobs right now is uncertainty. A loan keeps uncertainty going. Why take out a loan now if you do not know what the next six months hold? If they are going to make it a fiscal bomb, they might as well go all the way.