Bailout built on a mountain of debt. The avalanche will follow.
If you listen close, you can almost hear the low decibel hum of the printing presses within the well-guarded treasury facility in Fort Worth, Texas, churning out $100 bills faster than the mythical lightning bolt that struck Benjamin Franklin's kite.
On March 27 President Trump signed the largest relief package in U.S. history, extending aid to many struggling Americans through direct payments and expanded unemployment insurance. The package provides loans and grants to businesses and sends additional resources and assistance to depleted health-care providers. Treasury Secretary Steven Mnuchin has said he wants the payments to go out within three weeks, which equates to $22 billion additional C-Notes, which comes out to over one billion Benjamin’s every day for the next 21 days or, even more an astonishing, 41,666,666 $100 bills per hour.
Realistically, the treasury is not printing out that much cash, but it’s an important visual of just how much money we are talking about.
All U.S. residents, with adjusted gross income up to $75,000 ($150,000 for married couples) will get a $1,200 ($2,400 for couples) “rebate” payment. They’re also eligible for an additional $500 per child. The agreement provides $150 billion for state and local governments, with no state getting less than $1.5 billion.
While huge numbers of American citizens are either broke, or sick with some lying and dying in hospitals, or both, some of the 535 members of Congress grabbed the opportunity to pack pork into a bill designed to instill hope. Shame on the federal representatives who insisted on $25 million set aside for the capitol building’s cleaning supplies; $25 million extra for the House of Representative’s salaries; $1 billion kept for the airlines’ recycling program; $9 million for “miscellaneous Senate expenses"; $1 billion for an Obama-esk era free phone program; $30 million that will be fed to the Occupational Safety and Health Administration for increased regulations; $50 million to the “Legal Services Corporation” for “civil assistance” while legitimate businesses are left to fight through a vague assistance plan in the bill on their own; $25 million for the Kennedy Center and $75 million for the National Endowment for the Arts.
More political fat will surface as the details of this bill become common knowledge. But make no mistake, these payouts and payoffs are yet another symptom of this country’s bloated and ever-expanding national debt.
The year I was born, the national debt was a robust $319 billion, and every president and each congressional incoming class has largely ignored the expanding debt crisis. Republican and Democratic leaders are magicians at making taxpayer dollars disappear. Page one of any politician’s handbook reads the best way to get elected and re-elected is to spend.
If the coronavirus continues to prevent American business and American workers from returning to their normal routine, President Donald Trump and Congress will be forced to revisit multiple recovery stimulus packages — launching our national debt through the stratosphere. Or well beyond the stratosphere; it’s already blasted through.
This recovery package might be well-intended and may will serve its purpose, but previous gluttonous misspending cycles have left all of us in an unenviable financial situation. Currently, the nation's debt hovers just below $24 trillion, and if we continue to borrow and print money, not only will we surge past the $30 trillion mark, the inflation that eventually hits this country will be catastrophic.
The United States is in danger of increasing the national debt 100 times over in less than 60 years. Are you comfortable with your kids and your grandkids paying off the burdens that previous generations accumulated?
This is a Ponzi scheme of exploding debt and unfunded liabilities that will eventually lead to a collapse. Americans have become very good at accumulating and then neglecting both personal and national debt. Almost every American family is saddled with multiple varieties of cumbersome financial obligations. A typical American household is saddled with $137,063, including home mortgage, car, student loans, and even the evil high-interest credit card bill that arrives every month.
Nobody should be denying that the American people need a hand-up as millions of workers have been furloughed or lost their jobs entirely, but the economic impact of the COVID-19 virus has yet to claim all its victims. These bailouts will go two ways; we will either be crippled with debt-service ratios that will restrict economic growth (much like what's happening here in Connecticut), or inflation will force families to bring a wheel barrel filled with $50 bills to purchase a loaf of bread.
Lee Elci is the morning host for 94.9 News Now radio, a station that provides "Stimulating Talk" with a conservative bent.
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