A Sunday night surprise came just in time for the holidays! Congress finally agreed to a $900 billion “COVID Stimulus Deal” as reported by news agencies across the country. Per CNBC, the bill will:
send new federal assistance to households, small businesses and health-care providers for the first time in months and fund the government through Sept. 30.
It’s worth noting how this is presented: $900 billion is the supposed “COVID package,” yet the entire bill is expected to be over $2 trillion. In days ahead, should the bill pass, we will undoubtedly see surprises as to where our money is actually being allocated on our behalf.
Here are some highlights of what we know so far:
$30 billion into “procurement and distribution” of vaccines
$82 billion into schools and colleges
$13 billion into enhanced Supplemental Nutrition Assistance Program benefits
But a relief bill cannot be a relief bill if it doesn’t include direct payment to the general public. In this one we see:
direct payments of $600 to most adults and $600 per child
In the Fed’s Paycheck Protection Program (PPP), as of August 8, $525 billion has been distributed. However, the proposed bill includes $280 billion, nearly one-third of the total, allocated for the PPP. Federal Reserve chair Jerome Powell made it clear, at the last Fed Committee Meeting, that:
These are lending powers, not spending powers. The Fed cannot grant money to particular beneficiaries. We can only create programs or facilities with broad-based eligibility to make loans to solvent entities with the expectation that the loans will be repaid.
Regardless of who does the spending or lending, the list of programs, whether bailouts for some, relief for others, or stimulus for the masses, always amounts to the same thing; the idea of increasing the supply of money and credit for the purpose of bettering our lives. As one of the most antiliberty/pro–big brother years in recent memory comes to a close with rising reported covid cases and the “hope” of vaccine efficiency, it feels as though we’ve seen it all. It’s safe to say nothing shall surprise us ever again, especially when it comes to what the government and the Fed can do to “better our lives.”
The reality is, whether the bill is for $900 billion, $2 trillion, or $12 trillion, it will never be enough. It will hardly meet its objectives anymore than the Fed, which promises to provide low rates and an accommodative stance until its inflation and employment goals are met. Whether the stimulus check is $600 or $6,000 per person, it too will never “be enough.” And to make matters worse, the stimulus may never end. There is a very real cost to this government intervention, the Federal Reserve’s monetary schemes, and this exponential increase to the money supply.
Sure, Senator Chuck Schumer will claim: “The American people have a great deal to celebrate in this legislation.”
But I must disagree. Consider a $600 direct payment. It requires a handful of elected officials to decide on a seemingly arbitrary number. They must then somehow determine who is eligible and what the cutoff will be. Once this is settled, it becomes lumped in with $2 trillion of other interventionist ideas sold to the American people as a cause to celebrate.
Of course, the public must take this “free money.” But what seems to not be discussed is what happens after it is received. If spending or saving the money really made a difference, then wouldn’t our troubles have been alleviated by now? Or maybe it doesn’t work that way. Perhaps it’s a slow dose of stimulus, not too much to overheat things and not too little to slow things down, but just enough, that “Goldilocks” zone, a perfect sweet spot just to keep the wheels of commerce turning at just the right amount…but for whom?
