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Last week, the U.S. passed a milestone — US federal debt in private hands exceeded 100% of GDP. But does all this debt matter, or is worrying about debt passé? This debate has been going on among economists for a while. One does not need to go to the incoherence of "modern monetary theory" to find support for the view that debt has few consequences. Olivier Blanchard, of MIT and the IMF, in his Presidential Address to the American Economic Association, (excellent summary here) declared that “there may be no fiscal costs” of additional debt. The core of his argument...

WASHINGTON - President Donald Trump signed executive orders Saturday for coronavirus economic relief, upending negotiations with Congress after lawmakers failed to reach a deal on Friday. The executive orders establish a payroll tax holiday through the end of the year for Americans earning less than $100,000 a year. They also defer student loan payments through the end of the year; continue eviction moratoriums; and extend enhanced unemployment benefits that expired last week, but at a reduced level of $400 instead of the prior $600. "If I'm victorious on November 3rd, I plan to forgive these taxes and make permanent cuts...

President Trump says he will sign an Executive Order to ease the suffering of those harmed by the pandemic-related shutdowns and to stimulate the economy. Congress has failed to agree on a new package to accomplish these things. Trump’s Executive Order would include these four components: (1) a payroll tax holiday until the end of the year, (2) an extension of enhanced unemployment benefits until the end of the year, (3) an extension of the eviction moratorium for federal subsidized housing, and (4) a suspension of student loan payments until further notice. Questions surround the legality of accomplishing at least...

President Trump suggested this week the next coronavirus relief package could include a direct cash payment for American families that's potentially higher than $1,200. "It may go higher than that actually," Trump during an interview Wednesday with ABC affiliate KMID in Texas. "I'd like to see it be very high because I love the people. I want the people to get it."

he California Legislature, facing a $54.3 billion budget deficit in the next fiscal year beginning July 1, has chosen to increase spending in expectation of a federal bailout. The nonpartisan Legislative Analyst Office (LAO) on May 7 shocked the California’s Democrat leadership, that holds veto-proof control of state finances, that despite federal disaster funding of $26.625 billion from the Cares Act and a $10 billion in loan to pay for unemployment claims, the state faced an $85 billion deficit over the next 14 months. As a result of the COVID-19 coronavirus lockdown, California has suffered a huge economic decline with...

Because of the coronavirus bailouts, the federal deficit is now expected to be $3.7 trillion for fiscal year 2020. This is a huge drag on Americans' earnings and retirement security. Coronavirus panic is hitting the global economy, and America is no exception. To patch over the shelter-in-place orders and compensate closed businesses, Congress has passed well more than $2.7 trillion in so-called stimulus, including subsidized loans to businesses, increased unemployment insurance, direct payments to Americans, and funding for hospitals and state and local governments.Because of this, the federal deficit is now expected to be $3.7 trillion for fiscal year 2020....

California finance officials just revealed a $54.3 billion deficit in the first economic assessment of the coronavirus pandemic's devastating blow to the fifth-largest economy in the world. That figure is higher than the deficit during the Great Recession and obliterates the state's once-healthy reserves. Without sugar-coating how hard the prolonged shutdown of businesses and job losses will hit the state, Gov. Gavin Newsom's administration released bleak projections on key statewide indicators: 18% unemployment rate for the year, 21% drop in new housing permits and nearly 9% decline in California personal income. All this signals a financial tsunami and cuts to...

House Democrats are pushing forward with a massive fifth round of coronavirus relief legislation that could be their most far-reaching effort yet to address the economic fallout of the pandemic -- and come with another price tag in the trillions. While the House is still technically on recess, Democratic leadership and committee chairs have been drafting their legislative laundry lists for the relief package that could rival the cost of the $2.2 trillion CARES Act that passed in March, or exceed it. "We're looking at a multitrillion-dollar bill," one House Democratic aide told Fox News. While the text of the...

The Treasury Department will borrow a record-breaking $3 trillion between April and June as it moves to dispense emergency relief for the coronavirus pandemic. In a Monday statement, the Treasury said that it expected to borrow $2.99 trillion "in privately-held net marketable debt," which would leave it with a $800 billion cash balance at the end of June. Congress has passed roughly $3 trillion worth of spending to help prevent an economic collapse during the pandemic, including stimulus checks, expanded unemployment insurance, forgivable loans to small businesses and other financing options for larger businesses. SNIP That figure will be more...

The Treasury Department plans to borrow $2.99 trillion from April through June to cover the federal government’s massive response to the coronavirus pandemic, issuing a tremendous level of debt to try and limit the economic impact on U.S. businesses and workers. Last year, Treasury borrowed $1.28 trillion over 12 months. The $3 trillion in borrowing Treasury plans to do now would be done over just three months. Congress has approved nearly $3 trillion in new spending in the past two months to try and arrest the economic fallout of the crisis. Because revenue levels are falling, Treasury is planning to...

The coronavirus crisis is crashing the U.S. economy at the fastest rate since the Great Depression, the government reported Wednesday, while the Federal Reserve pledged to keep interest rates near zero as long as it takes to bolster a recovery. President Trump said the need for people to go back to work is so urgent that he wants to see a return soon to full-capacity restaurants, sports stadiums —and campaign rallies — with or without a vaccine. “We want it to be the way it was,” Mr. Trump said during a meeting with business leaders at the White House. “We...

The U.S. economy is expected to shrink at an annual rate of almost 40% in the second quarter, and the budget deficit will explode, the nonpartisan Congressional Budget Office said Friday. [snip] The CBO chief said the budget deficit would hit a nominal record of $3.7 trillion, well above the $1.413 trillion seen in 2009. The impact of the sharp drop in output on the government’s bottom line would be sharp. In addition to the $3.7 trillion 2020 deficit, the CBO said government debt held by investors and other members of the public would reach 101% of the size of...

Speaking regarding the Coronavirus crisis, Governor Newsom of California stated: "We see this as an opportunity to reshape the way we do business and how we govern." The Governor of California best first find himself an expert in miniaturization. California’s self-vaunted fiscal health has been a public charade for years and now with the Coronavirus will be fully exposed as nothing less than a Zombie nightmare. The size and scope of California’s governmental expenditures is not sustainable. The governor best concern himself with the State of California’s wallet before trying to concern himself with reshaping how we govern. U.S. News...

President Trump on Tuesday encouraged Congress to pass a $2 trillion infrastructure bill as the next piece of legislation to boost the economy amid the coronavirus pandemic. "With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill," Trump tweeted. "It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!" Trump last week signed into law a $2 trillion economic relief package targeting small businesses and workers impacted by the fallout of the virus....

NEW YORK - Republicans who have spent the past decade howling about the danger of ballooning deficits embraced the coronavirus rescue package approved by Congress and signed by President Donald Trump, shrugging off past concerns about spending in the face of a public health crisis. In many cases, the conservatives who backed the $2 trillion bill - the largest economic relief measure in U.S. history - were the very same who raged against the nearly $800 billion economic stimulus package backed by the Obama administration. But facing the unprecedented threat of a global pandemic - and working under a Republican...

The CARES Act, the $2 trillion coronavirus emergency relief bill that serves as Phase Three of Congress's coronavirus relief efforts, has passed the House of Representatives. It is the largest stimulus package in U.S. history and aims to provide funding for hospitals, and targeted relief for small businesses. The successful vote comes after hours of cantankerous debate, in which one unhinged Democratic representative was ruled " out of order " on the House floor. Once the measure finally passed, the entire House erupted - in a positive way. Lisa Desjardins ✔@LisaDNews WOW and just like that, the motion is adopted....

The COVID-19 pandemic can be used to illustrate two problems that are both more destructive than the virus. The problems relate to how Americans view the role of government in their lives and to the belief that government money can always fix problems. Let's look at the money issue first. The immediate reaction of our government to the virus threat was to spend massive amounts of money. The latest news is that politicians plan to "boost" the economy with nearly two trillion dollars in spending and loans. "The package is coming in at about 10% of GDP. It's very large,"...

Okay, I’ve been trying to do some research as to when “The Dafficit” (Hat tip to Daffy Jim Sasser) became a thing. About the only people nuttier than gold bugs and audit the fed crack pots. Country will never be broke, it can do something you or I CAN’T do. So when did this political-financial flim-flam get started and who did so?

Larry Kudlow, the director of the National Economic Council, said on Saturday that negotiators are doubling the size of a forthcoming coronavirus stimulus package as they try clinch an agreement. Kudlow said the size of the package would be approximately 10 percent of the county's gross domestic product (GDP), calling it a "very large package." When a reporter noted that 10 percent would be more than $2 trillion, he added: "That's correct." The decision is a significant uptick from the $1 trillion request initially submitted by the administration. Lawmakers are under significant pressure to quickly pass massive legislation to try...

There will be massive bailouts. I hope FR realizes this. Most Americans are in debt anyway, fiscal conservatives are declining. This virus will damage this economy and the nation. My governor Phil Murphy wants a NJ Transit aid package. It's over.