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| Economy |
| Spengler: The US should tackle coronavirus fears with massive fiscal stimulus |
| 2020-02-28 |
| [PJ Media] China’s stock market is the world’s best performer, thanks in part to massive fiscal stimulus in response to last year’s trade war and this year’s virus epidemic. That’s what governments are supposed to do in response to natural disasters, and the rest of the world should do the same thing. p ...With US and many other government bond yields at record lows, government budgets have nearly unlimited capacity to expand in response to the short-term economic shock caused by quarantines, travel restrictions, and business closings. Emergency response has nothing to do with Keynesian fiscal stimulus. Natural disasters delay economic activity but do not change the economy’s long-term growth potential, unless they kill very large numbers of people. That manifestly is true of Covid-19, which has a low fatality rate. The economic impact of the virus stems from preventative measures, which temporarily suspend economic activity. Governments should step in and provide a fiscal bridge. This is no different than storm or flood damage. ...To be effective, emergency measures must be big, dramatic, and immediate. Emergency tax reductions, including a temporary suspension of social insurance payments by individuals and businesses, are the ideal measure. Forty-four percent of Americans pay no income tax, but Social Security contributions comprise 12.4% of income, split between workers and employers. The US Congress should authorize emergency borrowing authority to make up the difference in the Social Security Fund. The Export-Import Bank, the Small Business Administration and other government entities should authorize emergency zero-interest loans for businesses especially affected by the epidemic, including oil drillers, transportation companies, hospitality and retail. |
| Posted by:g(r)omgoru |
| #12 And think of all the goodies they sneak in, like they just did with FISA reauthorization in the Coronavirus bill. |
| Posted by: charger 2020-02-28 20:36 |
| #11 ^ This |
| Posted by: M. Murcek 2020-02-28 12:31 |
| #10 A payroll tax holiday is not a bad idea. Directly tied to increasing domestic employment of wage & salaried workers rather than execs or offshore jobs. |
| Posted by: Lex 2020-02-28 11:37 |
| #9 Some investment in domestic production of pharmaceuticals might be in order, computers too while you're at it. |
| Posted by: Abu Uluque 2020-02-28 11:33 |
| #8 Never let a chance to loot the common man |
| Posted by: Bright Pebbles 2020-02-28 11:03 |
| #7 I would hold off until it seems things will collapse without it. The bank I work at learned its lessons from the 2008 crisis and is working with customers that have supply lines in China so they can continue to have credit and operate during this time. |
| Posted by: DarthVader 2020-02-28 10:49 |
| #6 Damn, this guy sounds jut like Paul Krugman, doesn't he? Throwing gobs of money at the problem works every time it's tried, doesn't it? He should / will get reamed by the Dems for wanting to 'raid Social Security', thus insuring someone out there is either laughing at him or ripping him. |
| Posted by: Raj 2020-02-28 09:08 |
| #5 Yeah fukin A we can bring back the one thousand dollar bill and wear them for face masks! Trump and his team should love that idea and ok it! |
| Posted by: Unock Phuling2028 2020-02-28 07:43 |
| #4 I'm putting my money in cans of SPAM. Worse case, I can eat my losses. |
| Posted by: Count Galeazzo Untervehr7098 2020-02-28 07:42 |
| #3 Goldman always seemed like one of the saner voices. Not this time. I'd love to hear what Jude Wanniski would have to say. |
| Posted by: M. Murcek 2020-02-28 07:38 |
| #2 Ref #1: Why bother with enticing savings with a decent return on investment when the Fed just turns it over to you for basically nothing? Which forces investors away from banks and insured deposits and into the Wall Street Las Vegas markets. What could possibly go wrong..... oh wait ! The banks haven't needed our money (investments) in many years. |
| Posted by: Besoeker 2020-02-28 07:09 |
| #1 Pardon me, the Fed hasn't let up on its Obama era massive fiscal stimulus to start with. Banks directly are funded by the Fed which is why saving deposits pay crap. Why bother with enticing savings with a decent return on investment when the Fed just turns it over to you for basically nothing? This all smacks of the money boys looking to protect their racket rather than dealing with the fact that so many business tied themselves to China rather than taking the hint and moving labor and production back to the US. One of the aspects of real capitalism is literally life and death of companies that fail to be managed for the long term rather than the quick buck. Adapt, improvise, overcome. |
| Posted by: Procopius2k 2020-02-28 07:02 |