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Original Caption: Biden Plans to Push for 1.9 Trillion Stimulus, Can America Print Unlimited Money?
Source: The country is a direct train
🔺 President-elect Biden announced the “US Bailout Plan.” The image comes from a screenshot of the transition website of the Biden administration.The time has come for Biden to deliver on his promises, and the American “money printing machine” will pick up speed again.
After receiving $ 600 in aid at the end of last year, most Americans expect to receive another $ 1,400 in aid.
On January 14 local time, US President-elect Biden launched a $ 1.9 trillion economic stimulus plan to address the impact of the epidemic on homes and businesses.
This “Plan de Rescate Americano” (American Rescue Plan) includes not only increasing direct payments to individuals, but also providing assistance for virus testing, vaccination, and state and local governments.
Yet even some Democrats questioned the “excessive luxury” of paying every $ 1,400 in cash checks. Can this plan “pass” Congress?
The Fed is printing money like crazy, can the “American rescue plan” save America?
Money for helicopters or a precise policy?
“There is a great need for the United States to launch a new round of bailouts for individuals, families and businesses. Currently, the total scale of the US bailout will reach US $ 5.5 trillion. Sun Lipeng, Director of the Bureau of Economics of the China Institute of Modern International Relations It is a direct train to the China News Agency.
Family, company, vaccines and school are the keywords of this rescue round.
China News Agency is a comprehensive Biden government transition website, New York Times, CCTV news, etc.
· Issue an additional $ 1,400 cash check to individuals, bringing the total relief to $ 2,000, including the $ 600 paid in December of last year;
Increase the weekly federal unemployment benefit from $ 300 to $ 400 and will continue until the end of September;
· Increase the federal minimum wage to $ 15 an hour;
· Providing $ 350 billion in aid funds to governments at all levels;
· $ 170 billion to support basic education and institutions of higher learning in the United States;
Investing US $ 400 billion in epidemic-related activities, of which US $ 160 billion is planned to be spent on the national vaccination program and novel coronavirus testing and detection, etc.
Can the “American Rescue Plan” Save America?
“The key is to have precise goals and measures to benefit each individual.” Sun Lipeng said that from the previous rounds of rescue effects, there are still many unsatisfactory places. More importantly, America’s current economic problem is a recession that is intertwined with a health crisis and an economic crisis, the core of which is controlling the epidemic.
The current anti-epidemic situation in the United States is not ideal. Even Biden said that the promotion of vaccines in the United States was a “frustrating failure.” On the 14th local time, Biden said he would develop a new vaccination plan. Complete 100 million doses of vaccine in the first 100 days of taking office.
In Sun Lipeng’s view, several rounds of bailout measures can only “stop the bleeding.” The key is that the United States has put measures in place to control the epidemic, fundamentally lift the US “economic blockade,” restore economic order and vitality, and then achieve real economic recovery.
How many obstacles do you plan to overcome?
Compared to the bipartisan $ 900 billion bill passed late last year, the bill has more than doubled in size and is slightly smaller than the $ 2.2 trillion “care bill.” Big spending and assistance to state and local governments may challenge Biden to win Republican support.
“If the new round of the bailout plan is to go into effect, he still has to ‘clear’ Congress after he takes office and get approval from the Senate and House of Representatives,” believes Sun Lipeng.
In view of the current situation in which the two parties in the Senate are tied (50:50), Sun Lipeng pointed out that under normal circumstances when the “regulation process” does not start, the stimulus plan should be supported by al minus 10 Republican legislators to obtain a three-fifths majority. Approved.
While House Speaker Pelosi and incoming Senate Majority Leader Schumer expressed appreciation for Biden’s plan in a statement on the 14th, they also pledged to translate Biden’s vision into legislation. to approve both houses and sign it. Law and hope to win the support of the Republican Party.
But today Senate Republican Leader McConnell and many senators oppose Biden’s plan to help state and local governments;
Additionally, many Republican congressmen questioned the need for Biden to spend money again after the Trump administration just launched a new round of the $ 900 billion stimulus plan last year;
Even Democrats, including Senator Manchin of West Virginia, questioned the direct payment of $ 1,400 to individuals and called it “an excessive luxury.”
Therefore, Sun Lipeng believes that if the plan is to take shape in the future, it is necessary to strengthen the coordination of positions with members of both parties in Congress.
Can the Fed “print money” indefinitely?
“President-elect Biden’s $ 1.9 trillion US bailout plan is ambitious, but it can be accomplished and will save the US economy and defeat the virus,” Biden’s transition team said in a statement.
The implementation of the rescue plan means that the Fed will continue to accelerate its “money printing.”
In fact, since March last year, the Fed has launched a crazy rescue plan.
A number of problems have arisen. Sun Lipeng said that at present, the total federal debt of the United States is close to 28 trillion US dollars, and the ratio of public debt to GDP has exceeded 100% of GDP. The Fed’s balance sheet has exceeded $ 7.4 trillion. The most important asset you own are the medium and long-term Treasury bonds of the United States. You are sharing the cost of crisis management and passing the financial and economic burden onto the world in the form of debt monetization.
“And this is the superpower that the hegemony of the US dollar bestows on the US government and the Federal Reserve.” Sun Lipeng believes that, however, this will lead to overspending by the US government, further aggravate the debt burden, and reduce the future space for fiscal stimulus policies;
And lead to a long-term weakening of the US dollar exchange rate;
At the same time, the expansion of the balance sheet has generated excess liquidity in the financial market, which has generated asset price bubbles;
The value of US dollar assets has been reduced and creditors have lost, which will affect the willingness to hold US dollar assets in the future.
“Excessive overdraft of the reputation of the US dollar will surely bring long-term irreversible losses to the US economic and financial hegemony,” Sun Lipeng said.
