Posted on 05/13/2020 12:53:25 PM PDT by Oldeconomybuyer
WASHINGTON - The U.S. government has a $3 trillion bulge of debt coming through the pipeline because of the coronavirus pandemic. It also has perhaps 30 million or more freshly unemployed Americans to support, tens of thousands of businesses on the ropes, and a possibly extended battle with a virulent disease to underwrite.
Given the choice between leaving the economy without a lifeline and making that debt load even bigger, Federal Reserve Chair Jerome Powell on Wednesday sent a not-so-subtle message to U.S. elected officials: Spend whatever you need in this crisis.
“There’s a degree of concern at the Fed that the bipartisan energy behind fiscal support seems to be flagging,” at a time when the fight against the virus is incomplete and expectations for a weaker recovery have grown, said Krishna Guha, vice chairman of Evercore ISI and a former New York Fed official.
With the U.S. central bank able if necessary to buy the massive new amounts of U.S. Treasury debt that spending by Congress might generate, Powell “is not saying ‘you spend 10 we buy 10 ...’ but is saying that the central bank will have your back in this environment ... not because the Fed is kowtowing to elected officials. It is what is required.”
It is an unprecedented moment.
As a result, Fed officials, and Powell in particular, are hunkering down for a longer fight than they first expected, and are suggesting a level of cooperation between fiscal and monetary policy that is more reminiscent of wartime.
“Now, when we are facing the biggest shock that the economy has had in modern times, is for me not the time to prioritize considerations like that,” Powell said.
(Excerpt) Read more at reuters.com ...
Three trillion to bail out all the state level deficit due to corruption so a new round of corruption can start.
Congress and the President create the deficit. The Fed has to make their deficit spending work.
Communist China declared non-conventional and economic warfare against us, and we sit here blaming other Americans. While Communist China gets off scot-free
Why post negative stuff like this? </s>
you should see the house bill.
that’s just ONE of MANY things it is funding.
It’s a ridiculous bill.
I don’t need another 1200. I’m good thanks.
Spend NOTHING.
We’ve already spent 6 trillion.
BTW, that 1200 is the bright shiny object that will cost 300 billion out of 3 TRILLION to distract us.
We shouldn’t fall for it
I noticed Forbes has similar articles. I think the media is now pushing Pelosi’s Screw the Hero’s 3 trillion dollar money grab.
Isn’t all of this additional money in circulation going to trigger inflation at some point?
We have not had a serious inflation problem since the late 70s early 80s. Let’s not laugh too much about the hundred trillion dollar bills from Zimbabwe and tell ourselves that something like that could never happen here.
The grocery stores already look like Venezuela, why shouldn’t the currency be measured with 00,000,000,000 added on with rubber stamps?
thought I heard him say that 42% of small businesses will go BK before end of 2021???
The federalcfeserve is a privage organization, they are not government.
its like a UN cabal of 12 private banks.
what percent go bankrupt in a normal year?
Not saying there won’t be more because of this.
Well, I don’t know but, it isn’t 42% nor would 50% of restaurants in San Francisco close shop forever.
Many of those restaurants have been around for decades and were on the 2nd and 3rd generation owners.
Those dreams are dead, and no funeral
Twenty percent of small businesses don't make it through their first year. About half fail within five years.
Too bad that this ‘wartime’ he speaks about is the war of the government, the bureaucrats and the media against the people and the future, not some external enemy.
Investopedia said this...
“According to the U.S. Bureau of Labor Statistics (BLS), this isn’t necessarily true. Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.”
So 45% is probably believable given the circumstances, but 20% would have failed anyway if Coronavirus had never happened.
Under the circumstances I think 45% could be conservative. We've never has a situation where companies were shut down for almost two months and then are restricted in such a way that makes if very difficult to make money. Hoping for the best.
All it took was $800 billion to get the Tea Party going in 2009. We have spent $3.5 trillion so far amd another $3 trillion may be on the way. Where is Tea Party v2.0?
“ Where is Tea Party v2.0?”
The Tea party changed to the T party in 2016. Still reviled by the establishment puppets on both sides, and still waiting for someone (anyone) to go to jail.
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