The big spenders in Washington want to go back to the money tree again and give Americans a fourth round of stimulus checks.
I mean, why not? We’re only $28 trillion in debt (and that doesn’t even include unfunded liabilities which could be as high as $100 trillion by some estimates), so what the heck? Let’s go for it.
Liberal members of the House Ways and Means Committee are calling for another round of stimulus checks, and President Biden has signaled that he is open to the idea.
Here we go again…
Yahoo Finance reported, “More than 80 mostly Democratic members of Congress have signed letters urging President Joe Biden to approve a fourth stimulus check. Seven members of the House Ways and Means Committee — a congressional panel with significant influence over government spending — recently became the latest to join the cause.
In their letter to Biden, the Ways and Means members said a fourth stimulus check and a fifth would keep an additional 12 million people out of poverty.
The lawmakers don’t recommend a specific dollar amount for the new payments. But other members of the House and the Senate have called for $2,000 checks, and so does a Change.org petition now signed by 2.3 million citizens.”
The time for stimulus checks is over. The economy is recovering and there are plenty of jobs to be had. Extended unemployment benefits have already been a drag on the labor market because people are making more to stay home and collect unemployment than they would if they got a job.
Adding more stimulus checks to the economy will only serve to exacerbate the problem.
Where is this money coming from?
That is a rhetorical question of course.
The Federal Government is spending money we don’t have.
The national debt spiked to $27 trillion, up from $22 trillion at the start of last year. Who is buying government debt? Answer: The Federal Reserve.
That’s right, the Fed is “monetizing the debt” by buying Treasury Bonds. Try and wrap your mind around that for a moment.
By buying government debt from private investors, the Fed makes the remaining bonds more valuable. These higher-value Treasuries don’t have to pay as much in interest to get buyers.
The lower yield drives down interest rates on the US debt. Lower interest rates mean the government doesn’t have to spend as much to pay off its loans. That’s money it can use for other programs.
In his testimony to Congress, Boston University economist Laurence J. Kotlikoff said, “America is broke today…indeed, it may well be in worse fiscal shape than any developed country, including Greece.”
By his projections, the Federal Government has $215 Trillion of unfunded liabilities. Most of these liabilities are driven by Social Security, Medicare, and Medicaid. These programs account for 60% of the yearly federal budget. The costs of these programs will continue to rise as more and more Baby Boomers retire.
But who cares about future generations? The current crop of politicians will be long gone by the time America becomes insolvent.
If history has taught us anything, it’s that you can’t print your way out of financial catastrophe. The printing press is the cause of economic Armageddon, never the cure.
The laws of economics don’t change, and they never will.