President Trump threw a wrench into coronavirus stimulus relief, calling the massive spending bill “a disgrace” and threatening to veto the legislation if Congress doesn’t go back and up the individual checks from $600 to $2,000.
It remains unclear how the politics will play out. House Speaker Nancy Pelosi tweeted “Let’s do it!” putting pressure on Sen. President Mitch McConnel to go along with the increased stimulus. What is pretty certain is stimulus is coming down the pike – whether sooner or later. Before Trump made his surprise remarks, Peter Schiff talked about the stimulus bill on his podcast.
The US government is stimulating everybody. Just not you.
Congress finally pulled together a stimulus deal. Both houses of Congress passed the $900 billion measure. It ranks as the second-largest “stimulus” bill in history, only behind the CARES Act passed earlier this year.
Stocks sold off Monday as markets fretted over the lack of progress on stimulus and a rise in COVID-19 cases. In his podcast, Peter talked about the sell-off and the political dynamics driving the markets right now. He also drove down to a question nobody seems to want to grapple with: why are the markets and the economy so dependent on and desperate for stimulus?
Last week, President Trump tweeted the rug out from under stimulus when he announced that negotiations were going to be cut off until after the election. The markets immediately tanked. But Trump quickly reversed course. As Peter Schiff explained in his podcast, the president is now in the process of out-Democrating the Democrats on the stimulus issue. Peter said the Republicans lost the argument the moment they conceded stimulus is “good” for the economy.
Peter Schiff appeared on RT Boom Bust along with Michele Schneider of MarketGauge to talk about market reaction to the stimulus stalemate, the impact of the upcoming election, and the prospects of the dollar.
The interview was recorded before President Trump tweeted the rug out from under the hope of a stimulus deal and cut off negotiations with the Democrats. At the time, Peter said it was certainly possible we could get another round of “so-called” stimulus, but none of it actually helps the underlying economy.
As Peter Schiff put it in his podcast, President Donald Trump tweeted the fiscal stimulus rug out from under the markets when he abruptly announced he was ordering his representatives “to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”
The Dow tumbled just over 375 points and the NASDAQ fell 1.6%. Gold also dropped, falling back below $1,900 an ounce.
The Nasdaq and S&P500 made new all-time highs last week. That leads many people to believe the economy must be doing OK. But as Peter Schiff explained in his podcast, the very thing that’s helping Wall Street boom is crushing the actual Main Street economy.
Most people remain blissfully ignorant of the economic wounds inflicted on the US economy by the government-imposed economic shutdowns in response to the coronavirus. But every once in a while, the curtain blows back and we catch a glimpse of the damage.
For example, a report released last week by global advisory firm Stout, Risius and Ross estimated that Americans currently owe more than $21.5 billion in past-due rent.
Bailouts are the name of the game right now. It seems like everybody is in line for a bailout. Airlines. Movie theaters. Small businesses. Hospitals. Not to mention the fact that the Federal Reserve has resorted to directly buying corporate debt.
Conventional wisdom tells us this is necessary. After all, the government shutdown put tremendous stress on businesses. Doesn’t the government have a responsibility to help them out?
Welcome to your future. Your government is spending it right now. And your children’s and grandchildren’s future to boot.
The US Treasury plans to borrow $2.99 trillion in the second quarter. The Treasury also plans to borrow another $677 billion in the July-September quarter, bringing the total fiscal 2020 debt to $4.48 trillion.
It’s a level of borrowing that’s difficult to even wrap your head around.