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Unsanitized: Deadline Day for Pre-Election Stimulus Comes, And Will Go

Published by Anonymous (not verified) on Thu, 22/10/2020 - 3:02am in

Today is a “deadline” day for whether or not there will be an agreement on COVID relief before the election... Continue reading

The post Unsanitized: Deadline Day for Pre-Election Stimulus Comes, And Will Go appeared first on BillMoyers.com.

A “Brazen Giveaway” GOP HEALS Act is a $30 Billion Bonanza for the Pentagon

Published by Anonymous (not verified) on Thu, 30/07/2020 - 4:17am in

On Monday the Senate GOP released their outline for a new $1 trillion coronavirus stimulus package. A successor to March’s CARES Act, the 177-page document, named the HEALS Act, includes no funding for hazard pay, the Postal Service, state and local governments, nutrition assistance, or help for uninsured or underinsured Americans, but incorporates a $29.4 billion bonanza for the Pentagon.

The package is presented as a necessary measure to help the country fight the COVID-19 pandemic, which has so far caused the deaths of nearly 153,000 Americans. But it appears that the GOP had a very different enemy in mind when writing some parts of it. “To prevent, prepare for, and respond to coronavirus, domestically and internationally,” the bill (pp. 35-38) allocates $686 million for the purchase of extra Lockheed Martin F-35 fighter jets, $650 million for A-10 Warthog fighter-bombers, $720 million for C-130J transport planes, $283 million for AH-64 Apache attack helicopters and $1.068 billion for P-8A Poseidon anti-submarine aircraft.

It is not just the Air Force that will benefit from the new bill; it also includes $41.4 million for Raytheon missiles, $260 million for a new Navy fast transport ship, $250 million for amphibious shipbuilding programs and $375 million for armored combat vehicles. Most of these military spending requests are ones that had previously been subject to cuts in February as the Trump administration moved Pentagon money around to fund construction of the border wall. The plan also allocates (p. 11) $1.75 billion to the FBI for the design and construction of a huge new facility in Washington, D.C.

 

“Amphibious ships don’t feed hungry children”

The new HEALS Act, which differs both in scope and its recipients from the $3 trillion Democrat-backed Heroes Act, which President Trump has promised will be “dead on arrival.” Unsurprisingly, Democrats have condemned the new plan. “The bill contains billions of dollars for programs unrelated to the coronavirus, including over $8 billion for what appears to be a wish-list from the Department of Defense for manufacturing of planes, ships, and other weapons systems,” said Vermont Sen. Patrick Leahy. “The bill provides nothing to address the long lines at food banks and shortchanges education and childcare, but we can shore up the defense industry? I am at a loss for words.” “Amphibious ships don’t feed hungry children,” added House Appropriations Committee Chair Nita Lowey (D-NY).

Yet Democrats have supported other sections of the bill, particularly that to do with cutting unemployment benefits. While providing a second $1,200 check, the HEALS Act also reduces unemployment payments from $600 to $200 per week, although in the long term it would move to a system where the government would pay up to 70 percent of a worker’s pre-COVID wages, a setup that most of Europe opted for in the beginning. “Look, it’s not $600 or bust,” said House Majority Leader Steny Hoyer (D-MD), claiming that a weekly $600 check serves as a disincentive to many to start working again.

The proposed act also ensures that businesses and other entities have near blanket immunity from coronavirus-related lawsuits coming from customers and employees. “Mitch McConnell’s new coronavirus ‘relief’ proposal is an utter disgrace. It somehow manages to make the pandemic and economic pain even worse,” wrote consumer advocacy group Public Citizen, labeling it a “brazen giveaway” to big business and the military.

 

A lack of popular support

Far from wishing to increase spending, a poll conducted earlier this month showed that the majority of Americans (including 69 percent of Democrats) supported Bernie Sanders’ proposal to cut the $740 billion Pentagon budget by ten percent, using the savings to fight the coronavirus and the impending housing crisis it is causing. Yet Democrats in both the House and Senate joined with the GOP to vote down the idea. The $74 billion in savings, the National Priorities Project calculated, would have been enough to end homelessness, pay for 2 billion COVID-19 tests, create one million green energy jobs, or hire 900,000 extra school teachers.

The U.S. military budget rivals that of the rest of the world combined, with the majority of federal discretionary spending already going on warfare. Earlier this month, Congress and the Senate passed Trump’s massive $740 billion military bill, an increase from previous years. Yet it seems too much can never be enough for defense contractors. While it is far from clear how attack helicopters and cruise missiles will help during a pandemic, it is not hard to see who will benefit from the new bill and whose interests are really being served.

Feature photo | Senate Republican Leader Mitch McConnell, R-KY, speaks to a NATO Training Mission – Afghanistan advisor during a visit to meet Afghan National Army soldiers at Kabul Military Training Center Jan. 16, 2011. Ernesto Hernandez Fonte | DVIDS

Alan MacLeod is a Staff Writer for MintPress News. After completing his PhD in 2017 he published two books: Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent. He has also contributed to Fairness and Accuracy in ReportingThe GuardianSalonThe GrayzoneJacobin MagazineCommon Dreams the American Herald Tribune and The Canary.

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Trudeau government should spend more on affordable housing and homelessness

Published by Anonymous (not verified) on Thu, 23/07/2020 - 7:15am in

On July 21, the Alternative Federal Budget Recovery Plan was released. The document aims to provide public policy direction to Canada’s federal government, in light of the current COVID-19 pandemic.

I was author of the Recovery Plan’s chapter on affordable housing and homelessness, which can be accessed here.

Trudeau government should spend more on affordable housing and homelessness

Published by Anonymous (not verified) on Thu, 23/07/2020 - 7:15am in

On July 21, the Alternative Federal Budget Recovery Plan was released. The document aims to provide public policy direction to Canada’s federal government, in light of the current COVID-19 pandemic.

I was author of the Recovery Plan’s chapter on affordable housing and homelessness, which can be accessed here.

To Fight The IMF’s Dire Prediction We Need More Government Debt – 10 daily

Published by Anonymous (not verified) on Thu, 04/06/2020 - 2:29pm in

By Warwick Smith

This article was first published on April 15 2020 at 10daily, which has since shut down. I’m reproducing it here now partly to keep a record in case the web site ceases to exist.

Yesterday, the International Monetary Fund (IMF) released the latest World Economic Outlook, in which it predicted Australia’s economy would shrink 6.7 percent this year.

This would be the biggest single-year fall since 1930 at the height of the Great Depression. They expect unemployment to reach 7.6 percent this year and climb to 8.9 percent next year. Despite noting Australia’s very large government spending program, the IMF suggests that greater fiscal stimulus may be needed to avoid even worse outcomes.

Meanwhile, Australia’s major political parties are both stuck in misguided and outdated attitudes towards government debt and deficits. During last week’s parliamentary debate about the $130 billion JobKeeper legislation, Anthony Albanese said, “We are headed for a trillion-dollar debt… It is a bill that will saddle a generation.”

If this dangerous thinking is allowed to dominate both sides of the narrow political divide in Australia over the next few years, then we will see unnecessary hardship and further loss of jobs on the Australian people.

This misguided thinking comes from the notion that the federal government is like a nationwide household and that if we spend too much now, we, as a nation, will have to tighten our belts in the future to pay for it. This may make intuitive sense but much of the true nature of money is not intuitive.

Paying attention only to money and debt often causes people (including economists) to lose sight of the real economy. The real economy is the production and distribution of goods and services. Our material standard of living at any particular time depends almost exclusively on the goods and services we are able to produce (and purchase from overseas) at that time. Is it possible for future generations to send goods and services back in time to pay for the current COVID response expenditure? Of course not, that’s a ludicrous suggestion.

Okay, so if we focus on the real economy and forget about the money for a minute, what are the real future consequences of spending now to support businesses and households? The fewer businesses go broke now, the quicker the recovery and the more rapidly we can get back towards full employment. The closer we get to full employment (and the full use of our infrastructure, factories, equipment, etc) the more goods and services we can produce and the higher the material standard of living we can have.

So what about the trillion-dollar debt then?

We have a very clear historical precedent we can use to shed light on the impact of debt and on the choices that lie before us. The highest level of government debt Australia has ever had was accumulated during World War II.

(Image: Ashley Owen, Stanford Brown)

This debt, 120 percent of GDP, would be equivalent to a debt today of well over two trillion dollars. If Anthony Albanese and Josh Frydenberg are right about the current debt burden, then post-war generations must have really struggled under that debt burden, right?

As it turns out, the opposite is true. The 25 years following WWII are often referred to as the post-war boom. We had strong economic growth, high wage growth, rapidly increasing material standards of living and falling inequality.

During this period governments of both political persuasions ran near constant modest deficits and the level of government debt to GDP fell sharply. This counter-intuitive miracle occurred because governments weren’t focussed on paying off the debt but were instead focussed on productivity and full employment.

Policy thinkers in the Curtin government, trained in the new economics developed by John Maynard Keynes, had seen massive unemployment during the Great Depression and then zero unemployment during the war. They figured that if the government could bring about full employment during the war then they could bring about full employment during peace time. They laid out this plan in 1945 in a remarkable white paper, Full Employment in Australia, that’s still very much worth reading today.

Australia’s unemployment rate, 1901-2001. (Image: Australian Treasury)

Arguably the 20th century’s most influential economist, Keynes said, “Look after the unemployment and the budget will look after itself”. In the 25 years following WWII, unemployment in Australia averaged two percent and, as noted above, government debt to GDP fell sharply, despite governments continuing to run deficits.

The same could be true in the recovery from the COVID-induced recession — if only our politicians could understand it.

Falling debt to GDP while governments run deficits could occur because the combination of economic growth and inflation saw the economy outgrow the debt. The debt was never really paid off, but the Australian economy was fully employed and was producing enough goods and services to provide Australians with an increasingly higher standard of living.

As I’ve discussed elsewhere, Menzies very nearly lost the 1961 election because unemployment was creeping up towards three percent as a result of reduced government expenditure. Menzies, chastised by the result, immediately adopted Labor’s policy of intentionally running a deficit in order to reduce unemployment — and it worked.

The dangers of austerity

If we adopt the attitude currently dominant in both Labor and Coalition party rooms that this debt is a burden that must be paid off, we will have the opposite outcome. This could entail implementing so-called austerity policies, lifting taxes and/or cutting government expenditure in an effort to pay off the debt. Both increasing taxes and cutting government expenditure remove money from the non-government sector, right when they need it for the economic recovery.

Cutting government services, including health, mental health, education, research, environmental protection and more in order to pay off government debt will inevitably result in higher unemployment, worse health outcomes and worse economic outcomes. We know, both from sound economic theory and from the lessons of history, that we don’t need to focus on paying off the debt. This means, if we do suffer as a result of government debt repayments, that we are doing so as a political and ideological choice, not out of necessity.

Instead, we should focus on full employment and on the real economy and let the budget take care of itself.

Nomi Prins: Big Banks Got the Sweetest Deal from the Covid-19 Bailouts

Published by Anonymous (not verified) on Thu, 28/05/2020 - 11:20pm in

Listen to this edition of Scheer Intelligence with Nomi Prins and Robert Scheer This post and podcast first appeared on Scheerpost     It’s been over a decade since the 2008 banking meltdown, and yet many Americans are still living with … Continue reading

The post Nomi Prins: Big Banks Got the Sweetest Deal from the Covid-19 Bailouts appeared first on BillMoyers.com.

The Dem’s $3 Trillion Dollar HEROES Act Can Not Brace Us for the Coming Shock

Published by Anonymous (not verified) on Tue, 19/05/2020 - 4:57am in

Tags 

News, Economy, stimulus

The actual number of people who stand to benefit the most from last month’s CARES Act could fit into Dodger Stadium and still have plenty of elbow room to catch any foul balls that might come their way. Just 43,000 of the richest Americans, those making at least $1 million a year, were handed a $1.6 million-dollar average “windfall” by provisions included in the bipartisan bill by Republicans.

Sections 2303 and 2304 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily suspends a limitation on tax deductions for capital gains and other “nonbusiness income,” effectively handing hundreds of billions of dollars in tax breaks to the wealthiest Americans worth an estimated $80 billion in 2020 alone.

On Friday, Nancy Pelosi and the Democrats introduced a massive $3 trillion-dollar stimulus package called “The Heroes Act,” named in honor of the monies allotted to front-line emergency workers. The new bill also seeks to repeal the egregious provisions included in the CARES Act, which allow hedge fund managers, real estate speculators, and business owners to apply them retroactively all the way back to 2017.

According to a study commissioned by Senator Sheldon Whitehouse (D-RI) from the Joint Committee on Taxation (JCT) at the end of April, less than three percent of the tax-relief benefits included in the CARES Act will go to people earning $100,000 a year. “Relief legislation ought to address the needs of small businesses and workers,” said Whitehouse, “not fleece taxpayers to benefit real estate moguls and hedge fund billionaires.” The Senator introduced a bicameral piece of legislation with Congressman Lloyd Doggett (D-TX) to “unwind” the tax-liability reductions and is part of the Heroes Act.

 

Austerity politics

Despite the clear political advantages of attacking such a grossly unfair gift to the most well-off at the expense of the most vulnerable, the Democrats’ HEROES act actually goes further in undermining the help offered to small business owners by excluding the Paycheck Guarantee Act, which would have assured 100 percent coverage of workers’ wages up to $90,000 a year.

A “mini-rebellion” reportedly ensued among progressives in the House over its exclusion but was eventually squelched by Pelosi, leading to the passing of the controversial bill in a 208-199 vote. In addition, the legislation stamped out efforts to provide monthly recurring relief checks of $2,000 per household, opting instead for a one-time payment in a second round of the $1,200 stimulus checks. Other measures aiming to correct some of the shortcomings of the CARES Act were also rebuffed by the Democratic leadership, such as automatic stabilizers to tie federal aid to economic conditions and logistical improvements for the delivery of funds to individuals.

While the Heroes Act was immediately pounced on by Senate Majority Leader, Mitch McConnell, and other Republicans, who derided it as an election-year ploy with “no chance at becoming law,” the implications of their political infighting for millions of Americans could prove very costly in both the short and the long term.

 

Raiding the castle

The disconnect between reality on the ground and Capitol Hill is staggering. As the Trump show continues and each side of the political aisle takes aim at each other, the economy’s freefall is quickly reaching catastrophic levels.

A recent University of Chicago poll found that 37 percent of unemployed Americans ran out of food in April. Kate Maehr, executive director of the Greater Chicago Food Depository, has “never seen anything like it,” referring to the 60 percent increase in the number of people visiting food pantries that are part of her organization.

Meanwhile, 46 percent of those surveyed confessed to worrying that they, too, might run out of food in the near future if they didn’t find employment soon. Their prospects depend heavily “on whether states can restart their economies without creating new surges in COVID-19 infections,” according to Gabriel Ehrlich of the University of Michigan. His assessment was echoed by the Federal Reserves’ Financial Stability Report last Thursday, which noted the “sharp economic contraction” resulting from the economic shutdowns would “create fragilities that last for some time.”

Fed chairman, Jerome Powell, stated last week that “Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage,” calling out the GOP for “pumping the brakes” on Pelosi’s $3 trillion stimulus bill. Senate Majority Leader, Mitch McConnell said the government should “take a pause here” and evaluate what has been done to this point.

Other Republicans voiced their opposition to the Heroes Act calling it “bloated” and “nothing more than the Democratic policy agenda masquerading as a response to the coronavirus crisis,” according to Rep. Tom Cole of Oklahoma. Only one Republican House member voted against his party and for the Democrat-led bill. Soon-to-retire Rep. Peter King of New York, who has served 14 terms in the U.S. Congress, told Fox News that he “had no choice,” asserting that “New York will absolutely collapse if that aid money is not there,” and adding that this wasn’t a time for politics.

 

Canary in the coal mine

New York City, in fact, provides a clear picture of what is in store for the country as a whole as the crisis motivates the wealthy to escape to safety and the less fortunate are left behind to deal with increasingly deteriorating circumstances. A recent article published by the New York Times delves into data provided by Descartes Labs and others, which analyzed smart-phone data to determine where New York residents had been over a two-week period in February when the pandemic began to unfold in the United States.

Notwithstanding the broader implications of smart-phone data surveillance, the results of the analysis determined that the city’s population declined by almost 5 percent as people with the means to do so fled to second homes out in the country or elsewhere. Peter Bearman, a sociologist from Columbia University, highlighted the contrast in inequality this phenomenon makes clear, stating that “everybody is really aware of the uneven distribution of risk, and the unfairness of having to work to provide services to people who are wealthy enough to avoid providing services for themselves”.

As the crisis deepens and those who don’t have the luxury of riding it out in the Hamptons or some other place are forced to stay behind in an economy in free fall, where unemployment is projected to reach unprecedented levels of 40-45 percent, the pussyfooting and pettiness that has become endemic in the American political system – run by the same class of people running for the hills with their million-dollar tax breaks – will inevitably give way to a mass insurrection by those most affected by their contempt, that not even a pandemic can hold back.

Feature photo | House Speaker Nancy Pelosi of Calif., speaks about the so-called Heroes Act, May 12, 2020 on Capitol Hill in Washington. Saul Loeb | Pool via AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post The Dem’s $3 Trillion Dollar HEROES Act Can Not Brace Us for the Coming Shock appeared first on MintPress News.

No Stimulus for the Weary: The US is Now Sitting on an Inflation Time Bomb

Published by Anonymous (not verified) on Wed, 13/05/2020 - 12:28am in

The consequences of the $2.2 trillion stimulus package are being ignored, even by the White House budget office that put it together, admitting that the package had “come together so quickly,” that they had no time “to do the customary modeling of its fiscal impact.” What does appear to have consensus in financial circles is that after this is over central banks will effectively own the governments of the world, including the United States.

When it is all said and done, President Trump’s stimulus checks will carry an inflationary cost many multiples more than their original $1,200 value in the pre-coronavirus economic reality, a reality that probably won’t become apparent until after the election in November. By then the checks will have served their purpose as a political move, not an economic one. When understood from the vantage point of what is in store for the American working classes as we emerge from this red light on main street, Trump’s checks will only add fuel to the inflationary fire just ahead, according to Neal Kimberley, a macroeconomics analyst for the South China Morning Post.

An economic realignment is unfolding in the wake of the shutdowns prescribed by pandemic response protocols. The coordinated effort to restrict individual participation in the economy spans the globe but is an inherently local matter. While corporations around the world “ride it out” by hoarding their government bailout money in the bond market, regular working people are bearing the brunt of the risk and facing a brave new world on the other side of the COVID Spring, where the distance between them and the richest 0.01 percent will have grown light years further than the recommended six feet.

Shocks to demand elicit certain reactions from the market, whereas shocks to the supply-side call on others. It is exceedingly rare for an economy to suffer shocks on both ends simultaneously, as is occurring at this very moment when both consumers and suppliers are in stasis. 

While governments slash interest rates to keep their borrowing costs low, the unprecedented flood of new money is accumulating in the hands of the wealthiest and most powerful people and corporations, who have parked all of it in bond instruments like a horse at the gate of the Kentucky Derby. As soon as the trumpet is blown and the economy restarts itself, those same trillions of dollars will come rushing out and cause massive inflation, which will only be exacerbated by low-interest rates. In other words, we’re sitting on a time bomb, and it is counting down the last seconds.

 

Expanding the debt pool

The same will hold true for recipients the SBA CARE Act loans, which has expanded the availability of government debt beyond traditional for-profit businesses and brought faith-based organizations into the public money sweepstakes. 

Beginning in 2001, when Geroge W. Bush first proposed a Faith-based and Community Initiative as part of his Presidential Management Agenda, the gradual inclusion of non-profits like churches and synagogues, but also a myriad other religious organization, into direct government assistance programs has continued unabated and the increasingly blurred line between church and state all but vanished once Trump’s Treasury department issued an “Interim Final Rule” for the CARES Act, making payroll protection loans accessible to faith-based organizations.

To put the $2.2 trillion CARES Act in perspective, the bill allocated a paltry 10 percent of the total ($250 billion) for direct individual assistance in a pie that was divided into hundreds of millions of recipients. $500 billion was allotted to SBA-related loans and the rest, or $1.7 trillion, went directly into the pockets of a comparatively minuscule portion of the population. 

From a macroeconomic perspective, the CARES Act only spread the government’s insurmountable debt further out into the economy, which is already more than “twice what it was before the Great Recession” and is set to increase exponentially in the relatively near future.

 

Sooner or Later

The dynamics put in play by the COVID Spring mirrors the conditions that led to the 2008 financial crash and its aftermath, in that a giant ball of financial poison had been festering behind the scenes and then metastasized around the world, ruining anyone in close proximity to a toxic derivative and no access to the FED window.

The toxic asset right now is the piles and piles of U.S. dollars and dollar-denominated assets and instruments saturating the global economy, which is tied to a nation – the U.S. – on a completely unsustainable economic path.

The degree to which inflation hits us is still a matter of debate among economists but many are expecting it will happen sooner or later. They concede that it is not out of the realm of possibility that “persistent” inflation is on the horizon. “We think the trade war has set this very real possibility in motion,” advised RBC economists to their clients. “Covid-19,” they continued, “is likely just pushing it further upfield.”

Ultimately, the pressures of a hopelessly indebted nation populated by a hopelessly indebted citizenry who are being told interacting directly with each other is dangerous sets us up for an Orwellian nightmare that no amount of Trump checks can justify.

Feature photo | Phu Dang, left, the owner of i5 Pho restaurant, gets help from a contractor as he boards up his business in Seattle’s downtown Pioneer Square neighborhood, March 30, 2020. Ted S. Warren | AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post No Stimulus for the Weary: The US is Now Sitting on an Inflation Time Bomb appeared first on MintPress News.

Jan Kregel: Why Stimulus Cannot Solve the Pandemic Depression

Published by Anonymous (not verified) on Tue, 12/05/2020 - 5:13am in

Jan Kregel: Why Stimulus Cannot Solve the Pandemic Depression

Published by Anonymous (not verified) on Tue, 12/05/2020 - 5:13am in

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