Thread – Why the Latest Pelosi-backed $2T Stimulus Bill Went Nowhere
1. The Dementiacrats have been holding more virus relief hostage in order to force Republicans to cave and vote for another $2T Dementiacrat porkulus bill instead.
Stimulus bill: $2,000,000,000,000 ($2 Trillion)
Dividing the cost by every person in America is $6,051.74
The government could have given every person over $6,000, but instead will give $1,200 to each adult under a certain income.
$300,000,000 for Migrant and Refugee Assistance pg 147
$10,000 per person for student loan bailout
$100,000,000 to NASA, because, who knows why.
$300,000,000 to the Endowment for the Arts - because of it
$300,000,000 for the Endowment for the Humanities/ because no one even knew that was a thing
$435,000,000 for mental health support
$30,000,000,000 for the Dept of Education stabilization fund/ because that will keep people employed (all those zeros can be confusing; that’s $30B!)
$300,000,000 to Public Broadcasting / NPR has to be bought by the Dems]
$500,000,000 to Museums and Libraries / Who the hell knows how we are going to use it
$25,000,000 for Cleaning supplies for the Capitol Building / I kid you not it's on page 136
$7,500,000 to the Smithsonian for additional salaries
$25,000,000 for additional salary for House of Representatives
$3,000,000,000 upgrade to the IT department at the VA - $3 Billion ? ? ?
$315,000,000 for State Department Diplomatic Programs
$300,000,000 for International Disaster Assistance
$90,000,000 for the Peace Corp pg 148
$13,000,000 to Howard University pg 121
$9,000,000 Misc. Senate Expenses pg 134
$100,000,000 is chump change
$1,000,000,000 Airlines Recycle and Save Program pg 163
$25,000,000 to the FAA for administrative costs pg 165
$526,000,000 Grants to Amtrak to remain available if needed through 2021 pg 168 (what are the odds that doesn't go unused)
$25,000,000,000 for Transit Infrastructure pg 169
$3,000,000 Maritime Administration pg 172
$5,000,000 Salaries and Expensive Office of the Inspector General pg 172
$5,000,000 Community Planning and Development pg 175
$2,500,000 Office of Housing
https://t.co/XAyypGcQex
More from Cancel the Dementiacrats - Stu Cvrk
More from Economy
On Jan 6, 2021, the always stellar Mr @deepakshenoy tweeted, this:
https://t.co/fa3GX9VnW0
Innocuous 1 sentence, but its a full economic theory at play.
Let me break it down for you. (1/n)
On September 30, 2020, I wrote an article for @CFASocietyIndia where I explained that RBI is all set to lose its ability to set interest rates if it continues to fiddle with the exchange rate (2/n)
What do I mean, "fiddle with the exchange rate"?
In essence, if RBI opts and continues to manage exchange rate, then that is "fiddling with the exchange rate"
RBI has done that in the past and has restarted it in 2020 - very explicitly. (3/n)
First in March 2020, it opened a Dollar/INR swap of $2B with far leg to be unwound in September 2020.
Implying INR will be bought from the open markets in order to prevent INR from falling vis a vis USD (4/n)
The Second aspect is now, that dollar inflow is happening, and the forex reserves swelled -> implying the rupee is appreciating, RBI again intervened from September, by selling INR in spot markets. (5/n)
https://t.co/9kpWP7ovyM
https://t.co/fa3GX9VnW0
Innocuous 1 sentence, but its a full economic theory at play.
Let me break it down for you. (1/n)
91 day TBills at 3.03%. Interest rates are even lower than RBI has them.
— Deepak Shenoy (@deepakshenoy) January 6, 2021
On September 30, 2020, I wrote an article for @CFASocietyIndia where I explained that RBI is all set to lose its ability to set interest rates if it continues to fiddle with the exchange rate (2/n)
What do I mean, "fiddle with the exchange rate"?
In essence, if RBI opts and continues to manage exchange rate, then that is "fiddling with the exchange rate"
RBI has done that in the past and has restarted it in 2020 - very explicitly. (3/n)
First in March 2020, it opened a Dollar/INR swap of $2B with far leg to be unwound in September 2020.
Implying INR will be bought from the open markets in order to prevent INR from falling vis a vis USD (4/n)
The Second aspect is now, that dollar inflow is happening, and the forex reserves swelled -> implying the rupee is appreciating, RBI again intervened from September, by selling INR in spot markets. (5/n)
https://t.co/9kpWP7ovyM
The argument for deficits & debt raising interest rates in the US is not increased credit risk, it is that interest rates are a function of economic fundamentals, flows & policy. Deficits/debt change those.
I can't tell if I'm agreeing or disagreeing with @jc_econ.
Increasing government spending or reducing taxes increases demand (or reduces saving). This raises the price of loanable funds or the interest rate.
In a dynamic context, more demand means a stronger economy, the central bank raises interest rates sooner, and long rates rise.
(As an aside, we are not close to the United States needing to worry about credit risk and the risks are more overstated than understated in most other advanced economies too. But credit risk is not always & everywhere irrelevant, just look at the UK in 1976 or Canada in 1994.)
Interest rates have fallen over the last 20 yrs while debt has risen. This does not necessarily mean that debt rising causes interest rates to fall. It could also mean that other things have happened at he same time that pushed down interest rates more than debt pushed them up.
The suspects for these "other things" include slower productivity growth, slower popln growth, higher inequality, less investment, etc. All of which either increase the supply of saving or reduce the demand for investment, reducing the equilibrium interest rate.
I can't tell if I'm agreeing or disagreeing with @jc_econ.
There is no relationship b/w deficits & interest rates in the US & many other advanced economies. Centuries of dynamic institution building underpin our reserve currency status that allows rates to be a function of economic fundamentals, flows & policy not credit risk 1/3
— Dr. Julia Coronado (@jc_econ) January 26, 2021
Increasing government spending or reducing taxes increases demand (or reduces saving). This raises the price of loanable funds or the interest rate.
In a dynamic context, more demand means a stronger economy, the central bank raises interest rates sooner, and long rates rise.
(As an aside, we are not close to the United States needing to worry about credit risk and the risks are more overstated than understated in most other advanced economies too. But credit risk is not always & everywhere irrelevant, just look at the UK in 1976 or Canada in 1994.)
Interest rates have fallen over the last 20 yrs while debt has risen. This does not necessarily mean that debt rising causes interest rates to fall. It could also mean that other things have happened at he same time that pushed down interest rates more than debt pushed them up.
The suspects for these "other things" include slower productivity growth, slower popln growth, higher inequality, less investment, etc. All of which either increase the supply of saving or reduce the demand for investment, reducing the equilibrium interest rate.
