Stimulus could reach 10% of our GDP at $2 trillion

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After two days of negotiations, no agreement has been reached among our political leaders on the size of the third stimulus or what should go in it.

Do I hear the squeals of pigs and smell pork? Hopefully not. We don’t honestly know, but if past is prologue, there is a lot of pork in a time of crisis. It is important to help the target population, but it could get to a point at which the cure is worse than the disease.

The stimulus could reach $2 trillion, 10% of our GDP and some Keynsians scream it’s not enough.

The purpose of the package is to ward off some effects of the virus, which is to some degree, overblown.

As negotiations progress, the size and scope of the package appeared to steadily increase. National Economic Council Director Larry Kudlow told reporters Saturday morning that it would likely exceed 10 percent of GDP —roughly $2 trillion. And he said small businesses would likely see a payroll tax holiday.

Senate Majority Leader Mitch McConnell (R-Ky.) is pushing hard for a deal, Politico reports.

GOP lawmakers and White House officials warn they will start drafting their own bill if no accord is reached with Democrats by Saturday afternoon. McConnell wants the rescue package by Monday.

We are facing up to 40% unemployment, some are reporting as a worse case scenario.

Among the outstanding issues are assistance for hospitals, a “State Stabilization Fund,” which would assist state governments with looming revenue shortfalls during the pandemic, and unemployment insurance.

Democrats want workers to see their full wages compensated. Republicans argue that the state agencies do not have the capacity to meet this demand.

Where Democrats think the money is coming for that is hard to say. Too many of our leaders want a complete redistribution of wealth and ignore our debt.


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How Soon Is Now
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How Soon Is Now
4 years ago

F.A. Hayek is the only economist that I trust. I hear Kudlow on the local AM radio and he is a winner, not sure if he is an economist by trade?
Fifty years of delusional fairytales are coming home to roost across all levels of society.
Things that cannot go on forever won’t and no amount of smoke and mirrors can prop up the delusion very much longer.
There ain’t no free lunch and no one is coming to save us. I’m so glad to have grown up during the timeframe where civics were still part of the curriculum and the teachers taught you to think for yourself.

Greg
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Greg
4 years ago

Think about it. The US alone has had 22000 seasonal flu deaths. The worldwide Wuhan virus deaths are now around 12000. Are we fighting Wuhan, or are we fighting seasonal flue.

Greg
Guest
Greg
4 years ago

I should have pointed out that twitter thread uses Italy as a basis for his arguments. There is NO damn comparison with ANY country and Italy.

Greg
Guest
Greg
4 years ago

And NOW, Nevada is shutting down all non-essential businesses. Yeah, just keep going. China is now winning.

Greg
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Greg
4 years ago

40%???? We’re talking DOUBLE the Great Depression. At that time did they just raid the public treasury to compensate people. They built infrastructure which assisted in economic development later. By taking this route recovery will stopped in its tracks. These governors who are instituting a complete shutdown but for essential services are NOT taking into account what it takes to “maintain” those services. Our economic system cannot work without the combined functions of a vast number of players. Look no further than Milton Friedman’s pencil analogy. The pencil, cheap in price, takes a great deal to bring to market and requires a host of people and industry to accomplish that. The government will be creating a snowball that could take decades to fix. Those “essential” services require a vast host of other people and industries in order to be maintained.