The solution to the coronavirus economic meltdown is to borrow our way out of it. The Federal Reserve slashed interest rates to zero and the stimulus bill makes all kinds of loan programs available to pretty much anybody and everybody. But American consumers were already up to their eyeballs in debt before the coronavirus lockdowns. In fact, consumer debt spiked again to yet another record in February, according to the latest data from the Federal Reserve.
As the coronavirus pandemic unfolds, a lot of people seem to be putting an awful lot of faith in government officials to save them. I don’t know. That just seems less than ideal to me.
The US national debt pushed above $24 trillion on Tuesday.
The US government was already running massive budget deficits long before the coronavirus pandemic and the debt was piling up at a dizzying pace. Response to the outbreak has put spending and debt in hyperdrive.
As the coronavirus lockdown drags on and governments at every level enact more and more draconian measures, nobody seems to have an answer for what I believe is a most crucial question.
What’s the exit strategy?
OK. I gotta be honest. Being effectively under house arrest isn’t very much fun. But it’s the world we live in now, so might as well make the best of it. I mean, I can at least still legally ride my bike. Not on the beach, mind you. But other than that, the outside isn’t completely off-limits.
Yet.
As the coronavirus-induced economic lockdowns have tightened across the US, we’ve seen the emergence of a government-inspired fantasy – the myth of the nonessential business.
Last week, Congress passed a $2 trillion stimulus bill in an effort to offset the economic impacts of the coronavirus. Most people have focused on the $1,200 checks to Americans and bailouts for industries hard-hit by the economic shutdown. But the 883-page bill does a lot more than that, including empowering the Federal Reserve to hand out billions of dollars in complete secrecy.
According to Owen Ullmann in an op-ed published by USA Today, there are some unsung “heroes” in the battle against the coronavirus pandemic – the brave and courageous bankers at the Federal Reserve.
I think Ulmann misspelled “villains.”
We now have QE to infinity and beyond.
On March 23, the Federal Reserve announced it will purchase an “unlimited” amount of US Treasuries and mortgage-backed securities. The Washington Post called the move “unprecedented” and said that it goes “much further than what the central bank did in the 2008-2009 crisis.”
Last Thursday, we embarked on a journey through the Southeast for business purposes and to check up on our kids who live in Kentucky. In case you were wondering, it is as crazy out there as you might imagine if you’re sequestered in your home following events through the news or social media.
Don’t worry; we practiced social distancing…mostly. And there was a lot of hand-washing.
