Forget a mere "stimulus", that is far too stingy to get America out of the hole we are in now. We need a massive DEBT JUBILEE like the ancient Israelites used to do every 49 years (and frankly never should have stopped doing!), and not just for student loans (though certainly for that too). And the forgiven/cancelled debt amounts must be 100% non-taxable since we do not want to defeat the purpose of the jubilee. So how can we do this without zeroing out everyone's bank account? Easy, just print (or more accurately, electronically keystroke) the money. The federal government is Monetarily Sovereign, and money is simply an accounting entry ever since we got off the gold standard on August 15, 1971. So make the entry and be done with it. And it wouldn't even be inflationary, since striking debt by the same amount as the amount of money creates has a net effect of zero on the money supply. Meanwhile, removing this massive debt burden would be a massive B-12 shot for economic growth. So even people who have zero debt and feel they have no dog in the fight would benefit from a stronger economy that is no longer weighed down by a massive collective debt overhang.
Additionally, we would also need a permanent Universal Basic Income (UBI) of at least $1000/month for adults and $500/month for people under 18 (and double those amounts for the first three months), single-payer Medicare For All, free public college for all, and things like that as well if we are to truly transcend the crisis America is in. Again, for a fraction of the amount that the FERAL Reserve creates every year to give/lend to the big banks, we could do it without raising taxes or inflation.
As for putting Americans back to work, there are three words: Green New Deal. The infrastructure upgrades and changes that need to be made will create lots of new jobs. And since goods and services would by definition increase in tandem with the new money created to fund them, the net effect on inflation would also be effectively zero as well.
(Hat tip to the brilliant and wonderful Ellen Brown for pointing so many of these things out.)
That said, what we will NOT advocate is shutting down the economy again and hoping to print our way out of it. Because deliberately shrinking the goods and services in the economy via shuttering the economy by fiat, while simultaneously printing money to paper over the hole, WILL be VERY inflationary if maintained for more than a few weeks at most. Just ask Argentina how well their world's longest lockdown is working, with 40% inflation and a COVID death rate higher than wide-open Brazil.
So what are we waiting for?
There should be a debt jubilee. There should also be stronger regulation of loan companies and credit card companies. Instead of singling out 18-20 year olds when they apply for credit cards, the federal government should cap interest rates for credit cards at 9.9%. There should also be a 72 month limit on servicing debt owed to credit card companies as well. This means that after 72 months, the debt is erased from the credit card balance sheet and the credit rating is not lowered for the individual.
ReplyDeleteAmen to that!
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