The Stimulus: Too Little, Too Late--But Still A Good Start

The much awaited stimulus package finally passed Congress and was signed into law by Trump yesterday.  While it is a good start, it is far too little and far too late to prevent a coronavirus recession, let alone recover from it--but it may just be enough to prevent or delay it from turning into a full-blown depression.  Hopefully, at least.

First, the FERAL Reserve fired their "bazooka" and cut interest rates to 1% and then to zero, restarted QE, and even cut the reserve requirement to zero as well.  The stock market still crashed.  Then they pledged unlimited cash assistance (via bond and asset buying) to any banks who may need it, a sort of QE on steroids or "UBI for the rich".  The stock market continued to tank, though ultimately seemed to reach an (interim) bottom after declining about a third from its mid-February all-time high.  Then Congress belatedly realized the need for fiscal stimulus, as the FERAL Reserve's measures really only shore up Wall Street and generally fail to "trickle down" to Main Street.  And now the FERAL Reserve is essentially out of ammo in terms of monetary policy.

The CARES Act, the third and most notable of the three coronavirus-related stimulus bills passed so far, among other things bails out businesses big and small, gives relief money to hospitals, expands unemployment benefits, and most famously, gives a one-time $1200 per person to most adults and $500 for children.  The whole package is $2.2 trillion dollars total  While good, this is still unlikely to be sufficient.   Rodger Malcolm Mitchell estimates that we need as much as $7 trillion in newly created dollars to really fix things for good.

What really needs be done are Rodger Malcolm Mitchell's Ten Steps to Prosperity, starting with abolishing FICA, implementing Medicare For All, and implementing Universal Basic Income (UBI), all paid for with new money creation.  We also need a Green New Deal and to improve our public health infrastructure as well.  Also, we at the TSAP believe that we need to pass an Act of Congress adding another, much more effective tool to the Fed's toolbox:  QE For The People, in which the Fed would deposit newly created money directly into the bank accounts of every single American.  This can be done in existing bank accounts, via debit cards, and/or by giving everyone with a Social Security number or ITIN an account at the Federal Reserve.  The latter was actually recommended by an author at The American Conservative of all places, who even described it as similar to UBI, showing that this idea is not just for leftists anymore, but rather transcends the entire political spectrum.  QE For The People will be far more effective than QE for the banks, since it works to stimulate the economy from the bottom up and middle out, not from the top down.

Also, the federal government should use its power of infinite money creation to purchase (at several times the market value) ventilators, masks, PPE, hospital beds, and any other essentials in short supply now, and distribute them for free.  And it would literally cost taxpayers nothing.  And yet, it took a crisis of such massive  proportions to finally and belatedly force the government's hand to even grudgingly give Americans free testing, paid sick leave, and modestly expanded food assistance in the first two stimulus bills.  Now is NOT the time to be cheap!

And lest anyone grouse about the National Debt, keep in mind that our Monetarily Sovereign federal can just print (or more accurately, keystroke) the money.  Yes, really.  That is what it means to be Monetarily Sovereign.  Money is just a simple accounting entry nowadays, so make the entry and be done with it.

Yesterday.

And if Fitch or Moody's or S&P threaten any credit rating downgrades for the USA, let them do what they will.  Then we should #MintTheCoin (i.e. a multi-trillion-dollar platinum coin) and call their bluff.  Problem solved.  Done, done, on to the next one.

It's not only about saving the economy from ruin, but now it's also literally a matter of life and death at this point.  Seriously.  So what are we waiting for?

UPDATE:  As of April, the Federal Reserve apparently has also begun helping Main Street as well as Wall Street, and taking unprecedented steps to do so.  Not quite full QE For The People yet, but hopefully it will eventually pave the way for it.  It's like they finally realized that a fully functioning Wall Street cannot really exist for long without a fully functioning Main Street.  After all, a purely FIRE economy cannot exist without an actual physical economy to back it up.

One Weird Trick, Part Deux

It just so happens that the very next day after we posted our "One Weird Trick to Rescue Economy" article, the highly progressive former Democratic Congressman Dennis Kuchinich posted an article of his own at The Nation.  Titled "Our Political Economy Is Designed to Create Poverty and Inequality", the article discusses how the economy is currently rigged in favor of the top 1% (especially the top 0.01%) at the expense of the ever-growing poor and ever-shrinking middle class.  This rigging is done through the tax code, obviously, but also through more subtle machinations such as the privatization racket (where formerly public services and utilities are privatized, at the expense of the people and for the benefit of the rich) which also includes our monetary system and the privately-owned FERAL Reserve that has controlled it for over a century now.

And most notably, he discusses a bill that he himself sponsored in 2011-2012 called the NEED Act, which would have ended this monetary racket via an independent Treasury (much like Ellen Brown's public banking idea) and the abolished the scam known as fractional-reserve banking.   The newly-created greenbacks would then be used to create full employment via funding much-needed improvements in infrastructure as well as education, healthcare, and other government spending, which would have been a great stimulus to the economy.   The bill would also restore the federal usury cap to an even lower 8% (it was 12% before it was removed in 1978) as well.  It even had the potential to also create a citizen's dividend (aka a Universal Basic Income), provide universal healthcare, shore up Social Security, and solve so many other problems at once.  Overall, an excellent bill.  But of course, the cowardly and venal Congress unfortunately did not pass it.

In case you were worried whether such an idea would create hyperinflation, allow us to put that fear to rest.  Currently, the private banks create new money out of thin air all the time, every time they make a loan.  The FERAL Reserve does this too, most notably the secret $16 trillion (which eventually became more like $29 trillion) bailout of the banks just a few years ago.  So why not have this process be publicly controlled and used for the benefit of We the People rather than the oligarchs?

As Ellen Brown notes, the Weimar hyperinflation in Germany from 1921-1924 occurred while the money was being created by the private banks.  Germany had been punished with crippling debt by the Allies in the aftermath of WWI, and they needed to create a lot of money to pay it.  The biggest problem, though, were the speculators who shorted their currency (betting that it would go down in value), which became a self-fulfilling prophecy. And the banks just kept on printing more and more marks to satisfy the speculators' demands, creating a vicious cycle of runaway hyperinflation.  The madness only stopped once the government got a handle on it by finally taking back control of the money supply in 1924, which was followed by a few years of relative prosperity before the deflationary Great Depression began in 1929.  And Brown also notes, as we noted in our previous article, that Germany got out of the Depression by using the "one weird trick" themselves (too bad they didn't do it much sooner, that is, before you-know-who took over in 1933).

(And just in case anyone predictably tries to play the "Jew card" after reading this, keep in mind that most oligarchs/banksters are actually WASPs rather than Jews, and have been for quite a while now.  Even the Vatican has their own bank now.  And the TSAP does not condone anti-Semitism of any kind.)

So what are we waiting for?  Let's finally put an end to artificial scarcity and artificially-created unemployment for good. Yesterday.

The Ultimate Stimulus Package

Wanna know a secret, everyone?  An open secret, yet probably the best-kept one of all?  The total amount of global debt, all $233 trillion (!) of it, is 100% man-made. That's right--the very concept of debt is man-made, because money itself is man-made.  That includes both private debt as well as the public debt that the austerity hawks won't stop fretting about.  Every single penny of it.  Money is really nothing more than a simple accounting entry in a computer these days anyway.  So make the entry and be done with it already.

Wait, hold on--did he just say what I think he said?  You got that damn right, and I didn't stutter either.  The single best stimulus package that could possibly be done given the current state of the global economy is--you guessed it--a DEBT JUBILEE of sorts.  You know, kinda like the ancient Israelites did every 50 years, where all debts were cancelled and forgiven across the board, period.  The only difference today is the scale and the technology involved, and the fact that we use pure fiat currency instead of specie makes it even easier still.  So why aren't we doing it?  I mean if the world owes $233 trillion, who on Earth do we owe it all to?  You guessed it--the BANKSTERS.  And the biggest contributor to the gargantuan size of the debt (and the number one cause of inflation as well) is compound interest, also known as USURY.  So there are plenty of powerful vested interests who would oppose such a thing, and it's time to take the power back.

We could start by paying off the national debt in one fell swoop via money creation, as is recommended by Richard E. Noble.  The Noble Solution, if you will.  And contrary to popular opinion, doing so would NOT cause hyperinflation if done properly because while creating money is inflationary, paying off large debts (i.e. "debt-deflation") is inherently anti-inflationary, so the two effects would cancel each other out.  And the newly created money would be done interest-free as well.  And also give everyone $1000 or $2000 as well.  Remember, back in 2011 Bernie Sanders audited the Feral Reserve and found that they gave a whopping $16 trillion secret bailout to the banks in 2009-2010 (and later rose to $29 trillion in total).   And with that money, they could have paid off the entire national debt (below $12 trillion then) and still had trillions left over to give to We the People by depositing money in our bank accounts.  And the government would have been able to do a much bolder fiscal stimulus package since there would be no worries about the debt.  Yes, really.  And the "recession" (i.e. depression) would have ended a LOT sooner as a result.

As for private debt, an Act of Congress could conceivably be passed that nullifies all such debt as well, including (but not limited to) student loan debt, mortgage debt, credit card debt, and medical debt. Creditors wouldn't like it, of course, but debtors greatly outnumber creditors, so the net effect would be beneficial overall for society.  And repeat every 50 years or so.

Additionally, while we are at it, we should also nationalize the privately-owned FERAL Reserve and make it a truly public FEDERAL Reserve that creates its own money interest-free, as Ellen Brown recommends.  We should also put a 10% cap on ALL interest rates period, including private loans and credit cards, and eventually phase-out the very concept of interest altogether.

Also, the TSAP would recommend a Universal Basic Income Guarantee for all, an idea whose time has come and that is in fact LONG overdue.  That would solve so many problems indeed.

Now THAT would be a real stimulus package!  Not only would it act like a giant B-12 shot for the economy by causing increased economic growth in the short to medium term, but in the long run it would also help us end our addiction to growth for the sake of growth, the ideology of the cancer cell which eventually kills its host.

Remember, as Buckminster Fuller famously noted in the 1970s, there are enough resources on Earth for everyone in the world to live like a millionaire, but such resources are currently being hoarded and wasted by the oligarchs to prop up their massive Ponzi scheme.  It's time to end the current obsolete paradigm of scarcity (most of it artificial) in favor of a new paradigm of abundance for all, that we may all enjoy mutual benefit and protection.  Yesterday.

(In the meantime, though, there is always Rolling Jubilee.)