The Fiscal Stimulus Gridlock

Dollar, Money, Cash Money, Business, Currency, Finances

The best can be said about a possible fiscal stimulus in the face of a renewed COVID-19 surge that is dragging the economy down as many areas shut down in various degrees is that at least a few hours ago the US Senate approved a one week continuing budget resolution to keep the fed govt functioning. In past years govt shutdown was a big deal, but with the current president threatening to seize power in a coup even in the face of the SCOTUS unanimously repudiating his final “Kraken” lawsuit, not to mention the positive drama of the FDA approving the Pfizer vaccine for US use, well, a govt shutdown right now does not look like such a big deal. But, hey, for at least the next week it will not happen, snore.

But we are facing a much more serious matter than the matter of just keeping the US fed govt going now, given that the US economy seems on the verge of possibly going into “double dip,” as cutbacks on economic activity spread as we see the coronavirus surging across the country. The House back in either April or May or thereabouts passed the NEROES bill that was a $3 trillion bill. Mitch McConnell in the Senate said no.

I do not precisely know when, but some months later, in an effort by House Speaker Pelosi, an attempted “compromise” bill was passed in the House of a bit over $2 trillion . This also led to no response from McConnell, and I note that it is not a matter of the Constitution that the Majority Leader of the Senate can single-handedly block for consideration bills passed by the House, much less presidential nominations for the Supreme Court as when in 2016 McConnell blocked even the consideration of Obama’s nomination of the clearly centrist nominee, Merrick Garland.

Which brings us to now, with the economy on the verge of a likely double dip decline, and the debate in Congress now reduced to an approximately $900 million deal, something put together by a bipartisan  group of centrists, a deal that by now has dropped the obvious demand of handing out money directly to people as was done earlier this year and so many other nations have done, an approach now backed by the vast majority of professional economists, with Noah Smith recently arguing, arguably a bit over the top, that all of macroeconomics has simply become “Give them money.”

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