Bitcoin Was Made For Times Like These

On Tuesday, Larry Kudlow, director of the U.S. National Economic Council, said that the size of the stimulus package being debated in Congress will reach $6 trillion. Of that $6 trillion, $2 trillion is coming in the form of direct aid to individuals, small businesses, the airline industry, midsized companies and more. The remaining $4 trillion comes in the form of lending power for the Fed.

Assuming the bill is signed into law, the cost of this package will be larger than the annual U.S. federal budget, which was expected to come in at around $4.3 trillion this year.

And I don’t think the initial $6 trillion will be nearly enough. Most of the money in this bill will be going to struggling corporations, not American citizens. Right now, the plan allocates only $1,200 in direct assistance to each individual (and $500 for each child under age 17).

People are going to need a lot more assistance than that. Before this crisis, 58% of Americans had less than $1,000 in savings. During a time like this, $1,200 is not nearly enough.

I suspect that before the year is out, nearly every household will receive at least $10,000 in freshly printed money.

And corporations will likely need multiple rounds of bailouts.

I don’t see anything that can stop the money-printing tsunami that is coming. There’s too much debt in the system, too little savings and too little income with the economy being basically shuttered over COVID-19.

We are going to see Modern Monetary Theory (MMT) in the real world, starting now. Here’s what I wrote about MMTin November.

I am more convinced every day that MMT is coming to the U.S. And that the Federal Reserve will soon be funding our government deficits.

I’m not the only one who sees this coming. Bloomberg recently published an article titled “Economists Worry That MMT Is Winning the Argument in Washington.”

As I pointed out last week, the choices politicians have for paying off our debt are pretty simple…

  1. Raise taxes dramatically.
  2. Cut government spending 40% to 50%.
  3. Print money.

I believe they will choose to print money as the primary solution.

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