And here comes the next round of stimulus.
As long as large portions of the economy remain on lockdown, the government will be forced to perform massive stimulus programs/ social spending. As I write this Friday morning, the House is preparing to vote on a $3 trillion stimulus bill later today.
While the particular bill in question is chock full of Democrats’ legislation (more abortion funding, banning voter IDs, etc.), and likely won’t make it through the Senate in this particular form, the White House and the GOP are both in favor of providing additional stimulus checks to Americans in the near future.
Put simply, regardless of specific political affiliations, the political class is currently in favor of spending vast amounts of money right now.
All of this money has to come from somewhere. Currently, it’s the debt markets (the Treasury will borrow $3 trillion between April and June alone). But at some point, the Powers That Be will begin looking for new sources of capital.
Indeed, if history has taught us anything it’s that once the government/ elites use a crisis to make a massive power grab, rarely if ever is that power given back to the people.
We saw this with the Patriot Act in 2001, the policy response to the 2008 crisis. And it’s happening again today with the economic shutdown. While individual states will all eventually reopen, the fact is that the US just took a massive jump towards outright socialism/ central planning. And the political class LOVES it.
This will result in a collapsing economy, which in turn will mean lower tax revenues, which in turn will mean a greater need for capital to finance social spending programs/ unemployment/ stimulus checks.
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