Skip to comments.U.S. stimulus package is biggest ever, but may not be big enough
Posted on 03/30/2020 10:27:17 AM PDT by Oldeconomybuyer
The Federal Reserve has offered more than $3 trillion in loans and asset purchases in recent weeks to stop the U.S. financial system from seizing up, but it has not yet directly helped large swaths of the real economy: companies, municipalities and other borrowers with less than perfect credit.
That is partly because Americas central bank is not allowed to take much credit risk itself, and loans to lower-rated borrowers have a higher chance of losses. The risk is exacerbated by the spread of coronavirus which have brought economic activity to a screeching halt.
To alleviate that constraint, the U.S. Treasury - whose job it is to manage the governments finances and help the Fed keep the economy steady - has taken on some of the risk that Fed loans will not be paid back.
It has contributed about $50 billion from a pool of money called the Exchange Stabilization Fund. That money will be used to absorb losses from Fed loans that go bad. Assuming only a fraction of loans will default, the Treasury contribution has allowed the Fed to lend much more without taking on additional risk.
On Friday, the Treasury got about $450 billion more from Congress as part of a $2.2 trillion U.S. stimulus package, greatly increasing its ability to support the economy. Before the bill passed, the stabilization fund had about $93 billion in assets as of the end of February.
Treasury Secretary Steven Mnuchin told Fox News on Sunday he believed the additional funds could help the Fed and Treasury provide about $4 trillion in loans.
But investors and economists said even this additional money may be insufficient, and Congress will likely need to pony up trillions of dollars more before the Fed and Treasury can make a significant dent in the real economy.
(Excerpt) Read more at reuters.com ...
Biggest boondoggle ever.
Reuters -read no further.
Reuters is a world leader in fake news.
Agree - the rape of future generations. Let the party begin! MORE MORE MORE - Screw American’s future!!!
Rep Massey(?) made a great point....for the $2 TRILLION we’re spending we could have sent a check for 13,300 to the 150,000,000 workers in the country. That’d be a better help than the $1,200/$3,400 people are getting.
Just to give a sense of scale, “as much as $6 trillion” amounts to about $17,000 to every man, woman and child in America, citizen or not, if they just wrote each of us a check. A check of $68,000 for every family of four. How much of that do you suppose you will see?
Nancy is currently dreaming up another one. They see an avenue for pushing their agenda and won’t let this crisis go to waste
So do we continue on this road until China refuses to let the US borrow any more money?
Like a narcotic. The addict is always looking for a bigger high.
I am getting a GoPro Hero8.
Congress will likely need to pony up trillions of dollars more
“Congress doesn’t have a cent to “pony up” with.
Our great great grand children will still be doing the ponying.
Hey Reuters, shut up.
let’s think about this... the Fed magically creates this $2.2-trillion out of thin air for Congress to piss-away. If creating money out of thin air does not represent a problem, short-term or long term, why not ‘only’ create $350-billion? Then pay every man, woman (the hell with the other 26 genders) and child in the US $1-billion each. Then nobody needs their job, all the business closings/failures won’t matter. Everyone can live a life of ease. And it saves $1.85-trillion!!
You can’t shovel enough treasure into the maw of the Beltway Beast.
Partisan Media Shills update.
I am getting a GoPro Hero8.
I may buy a Joe Biden AR14 with a 1000 round clip magazine.
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