Trump $6.2 TRILLION Fight Against COVID Is Economically Responsible

Finance is a convenient servant to the economy. Finance is not even necessary to the economy, and no economy, no money.  The six trillion dollars signed and negotiated by Trump do two things: 1) and most important, sustain and amplify the essential economy. 2) keep alive the non-essential economy, which would otherwise stop existing (… we can gently ease it out later…) 

The 2.2 Trillion Dollars Coronavirus Aid, Relief, and Economic Security (CARES) Act passed the US Senate 96 to zero (4 Senators were COVID or quarantined). Two days later the US Congress passed it, and Trump, who had helped to negotiate the details, signed it immediately. There were no hearing: all gt together, including Trump, who agreed to much Democratic ideas…

This was the largest financial intervention act of a state in the history of humanity.

The same day, Trump used the Defense Procurement Act, forcing General Motors to produce respirators. Trump added he may use the FPA again, as “we have a couple of little problem children… two companies which are NOT doing what they said they would be doing”.  

Some anti-Trumpers screamed to high heavens that Trump was exploding the national debt, and bringing financial ruin to the US. Critics of the 6.2 trillion dollar intervention do not understand how the economy works. In particular, they do not understand the essence of the economy, which is GOVERNMENTALISM. Let me explain.

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Big US debt procurement during World War Two was highly profitable to the US… and WORLD, economy… Let alone those who wanted to smash Nazism and other fascisms…

National debt, in a sovereign country acts, potentially, like a future tax, on those wealthy enough to have lent the money, or, potentially, as a future tax on those who received the money… I say debt is a “potential tax”, because reimbursement conditions can, and often, will vary. For example, if money is lent, but not reimbursed, it acts as gift, or theft, depending if one is on the receiving, or donating end. Europeans have acted stupid, ever since the EU was founded, as if they didn’t understand that (but the UK understood it, explaining partly its better economic performance.)

Let me add that this is not the case here; the 6.2 trillions are no augmentation of the national debt (explanation another time). 

What Trump is doing is putting the US economy on life support, while providing massive financing for research and development… and health care: 150 billion dollars for hospitals alone.

Here is an example: CDC Dr. Fauci said industrial fabrication of vaccines will be launched, even while one can’t know yet if those vaccines will work, or even if those vaccines do not launch the dreared “IMMUNE ENHANCEMENT”… that is during Phase 2 trials; that will be costly as perhaps two dozen vaccines are being developed (using sometimes extremely different methods: the Pasteur institute is using its usual method to see if its hybrid coronavirus-brucellosis is safe on mice and soon primates… While Sanofi will further push a 2017 “prototype” SARS vaccine using recombinant tech; several RNA vaccines are already in human trials, testing for basic safety…)     

A nominal increase in national debt acts as real free money for now.. And a potential, just potential, tax. I say potential, because, for a country of Argentina and if the money has been lent by foreigners, one may have to pay back part of it… But if one is the USA, one doesn’t have to pay any of one’s debt. Especially to foreigners. If foreigners don’t like it, they should feel happy to have lend so much money to such a superpower. 

One of the reason the European economy has stagnated is that it has insisted to inflict high taxes on citizens, instead of much more forgiving debt (which growth can erase; so debt enables and incites a sovereign country to grow faster…)

As it is, moreover, Trump’s two trillion is not necessarily a debt. And it’s actually six trillion dollars. 

Japan has a national (“Federal”) debt in excess of 200% of GDP. On March 27, it had only 49 deaths from Coronavirus, out of 1,700 cases, with a (so far) completely flattened curve, and a death rate per million not even one tenth that of the USA. In general the Japanese economy had not been doing badly with that debt… maintaining, for example a first class universal health system…. At a time when the USA is demonstrating, for the whole world to see, that a profit guided health system is a colossal disaster. Indeed, soon the USA may have much more than a million Coronavirus cases, and that will be imputable in part to not have been willing to spend more on healthcare (instead of spending on the billionaires who profit from US healthcare).  

The Federal government created two trillion dollars as direct help with CARES. To this one has to add 4 trillions of the US Federal Reserve at the disposal of banks through leverage (to start with; the Fed has said it will create whatever money is needed). None of this money is really debt. At most it means part of the US economy is getting nationalized (the average citizen becomes a shareholder).

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Take four cases I personally know of:

Picture a 500 rooms/apartments hotel/resort without any revenue for the rest of the year. It’s a “family business”. It has employees, pays their healthcare 100%. It’s at 7,000 feet, it has large fixed cost in heating, security, maintenance. And revenue is now zero. And will stay so for many months. What to do? A bank loan! But where does the bank get the money from? The Federal Reserve, which lends it at zero interest!

Picture my climbing gym. Actually a company with a dozen climbing gyms, with course setters, maintenance, staff, and paying 100% health care. Same story as the preceding.

Third example: a research institute in AI getting its money from corporations with now zero revenue. They said they were firing all their scientists, effective in June. The Trump administration is stepping in.   

Fourth example: Several science museums I know. There is money for them in the two trillions. Trump himself explained the Kennedy Center for the Arts needed 25 millions to pay salaries, maintenance (the Dems wanted 35 millions initially). 

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Trump is using MASSIVE GOVERNMENTALISM. Smart.

What is important is that expertise not be lost. OK, a bit of expertise lost in completely useless parts of the economy will be OK… But futuristically essential services should be maintained. For example in teaching, research, industrial base. 

The mightiest states are always living with fiat money. The Inca were using knots on ropes. The very fact a state can impose fiat money is an expression of its power. As it is, there is going to be a hole of one third of GDP, because one third of all transactions in one year will not happen. So the state making it so that it will appear these transactions did happen… Even if they didn’t. 

Debt, left unpaid, means some people with excess capital may be cheated on. But debt, left unpaid, can save an economy. What is it not to like? I always said that Trump, as his chronology and behavior indicates, was truly a real Democrat (aka a “populist”… despised by the haves). TARP, organized by Obama, was truly a Transfer of Assets to Rich People. Whereas CARES has tight oversight, and pays the average family (which TARP didn’t do). CARES is the right thing to do. The alternative was a depression worse than 1929.

This virus crisis is an excellent occasion to find out how the economy works. First, one can see that 90% of the economy, or so, is useless. One can also see that the essential part of the economy, including scientific research, advanced, life saving technology, is underfinanced.

In Italy, some medical workers get paid less than $1,000 a month. Yes, less than a thousand dollars, and now the opportunity to die. But then they were honored by watching on TV brainless muscle guys paid more than one hundred million a year, just to hit a ball with their foot.

Ironically enough, the USA, and the world, is lucky that the US President is a specialist of saving (his won!) value through bankruptcy (ironically yours truly saw this, at the time, as corruption… Meanwhile, though, we have seen much bigger corruption than that…

CARES is bringing in money, as needed. Trump is ordering around General Motors, as, unfortunately, needed. This is a war. War can be good.  Universal health care systems in Europe were created thanks to the shock of World War Two. Coronavirus is the bellicose occasion we needed to reorganize the world economy in a more essential way.

Patrice Ayme 

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This Alone Validates Clinton’s Loss

I was poking around the definition of “national debt”, by consulting various online entities, some of them governmental. “National debt” varies according to what one considers. I was looking to see whether “Quantitative Easing” (the buying by the central banks of depleted assets to the wealthiest to make them wealthy again — the way it was done by our unforgivable leaders).

The smallest interpretation of “national debt” in the case of the USA is around $13 trillions, 80% of US GDP. That smallest notion of debt considers only the FEDERAL debt held by the PUBLIC… After excluding all sorts of obligations (like Fannie Mae and Freddie Mac, real estates entities held by the US government)… or what the US government owes to future Social Security recipients (most of the US population). The smallest number is what the Demoncrats love to brandish. However, it will not affect the stunning discovery I made (below).

This Is The Smallest Interpretation Of Debt, The One Held By The Public, After EXCLUDING All Sorts Of Gigantic Obligations, Bankrupt Governmental entities, And Inter-Governmental Debt, And Also After Excluding the “Fed Balance Sheet”

Obama augmented enormously the US National Debt. What for?

The OECD considers that US government debt, including state and local government, is 125% of US GDP. By comparison, the OECD considers that the “general government debt” of socialist France is a bit less, 120% of GDP (same link).

The maximal interpretation of the US National Debt is well above 50 trillion dollars, more than 300% of GDP. Similar numbers, in terms of percentage of GDP, are true for comparable countries (such as France, UK, etc.)

The US government seizes some revenues, like the Social Security tax and consumes it right away (instead of putting the money in the Social Security Trust Fund). The result of this sort of maneuvers is “intergovernmental debt”, which is around 6 trillion dollars. I knew this. This “borrowing” from Social Security has to be absolutely incorporated in the notion of National Debt, because it represents borrowing from the Public by other (unwilling) means. Fair accounting requires to do this.

By this reckoning, the internationally recognized US Federal debt, in December 2015, a year ago,  was 101% of US GDP (a number comparable to that of socialist France… I don’t mean that as an insult: the present presidency of France is held by the French Socialist Party, and so is the Parliament and Senate! They will be thrown out of power in five months.)

But then I learned something new, which jumped at me. The US National Debt reached 106% of GDP in July 2016, six months later. That is an annual rate of augmentation of roughly 10% a year. In a way, it makes sense: when Obama was inaugurated, the US National Debt was just 68%. So, in seven years, Obama increased the US debt by 33%, a rate of augmentation of nearly 5% a year. So Obama just doubled his rate of augmentation of US debt in 2016.

After I pointed out this enormous jump of the debt on Tweeter, I got the following reaction (from which I borrowed the title of this essay):

Philip N. Beam Sr.‏@PhilipBeamSr

@Tyranosopher @CraigRBrittain @wikileaks Just this alone should be enough to validate Hillary’s loss.

Indeed.

And this debt catastrophe is not going to improve: the cost of Obamacare is up 25% from 2016 to 2017. The New York Times and the Reaganite Paul Krugman (the fellow Nobel of Obama and self-aggrandizing, self-described as “the conscience of a liberal”) swooned that this 25% jump in Obamacare cost, was just a one-time augmentation.

However, as there are no serious cost controls in Obamacare, this is highly unlikely: taxpayers will have to pay increasingly plutocrats such as Warren buffet, who made many billions out of US health care, to better lecture the losers down there who don’t know how to invest or work, and, moreover, vote for Trump.  

One may wonder how, mechanically dear leader Obama generated so much debt. The following graph explains it all: Obama lowered the taxes on the wealthy, while showering the poor with gold, and various services, to make them stupidly favorable. This is a very old method, invented and practiced industrially, by Roman emperors (it did not end well).

Under Obama Tax Receipts, Which Come Mostly From Taxing The Rich, Were Kept Artificially, Unsustainably Low. No Wonder the Hyper Rich Were Mostly All For Obama, And Against The (For Them Frighteningly) Unpredictable Trump.

So Obama was a Progressive In Name Only (PINO), or DINO (Democrat In Name Only). He built up a giant deficit, and thus National Debt, so that his friends would stay rich.

Yes, indeed. During the 2008 crisis, part of the wealthiest lost most of their wealth to fellow wealthy people (thanks to a lot of leveraging, as organized by Clinton, Bill). Obama could have let the entities in difficulty go bankrupt, as Reagan and Bush Sr. did in the 1980s. And then buy them on the cheap. Instead he went a different route, using TARP and paying TARP with Quantitative Easing. A route which made the wealthiest, wealthier. (He probably does not understand this, to this day!)

A related matter is the striking improvement of some US socioeconomic metrics in the last couple of months before the US presidential election.

For example, the US median family income rocketed up in the last few weeks before the elections.. I was very surprised by this, and suspicious. Indeed, the US median family income peaked, in real dollars, in 1998, when it succumbed to Bill Clinton’s pro-wealth policies of the Goldman Sachs government. Ever since it has been down, as Democrat and Republican leadership followed the sort of Reagan, trickle down policies which got great demoncratic leaders such as Robert Rubin, Lawrence Summers and Paul Krugman launched (Rubin was CEO of Goldman Sachs, while Summers and Krugman were at the White House, telling Reagan what to do).

In Brazil, president Dilma Rousseff did a similar trick: she cooked the numbers to make the economy look better than it really was. She was re-elected, thanks to those numbers, but when the cooking surfaced, and started to smell bad, she was impeached. It turns out that the Brazilian sociopolitical leadership is thoroughly corrupt. All the way to socialist icons and ex-guerillas (such as Dilma; by the way, Dilma did not profit personally materially from the cooking of the numbers… except that she got, however fleetingly, re-elected).

Some will say that the USA is not Brazil. Indeed, the USA is much more corrupt, so the institutionalization of the corruption in the USA is hard to even point out, lest one is ready to be called a lunatic.

It is not just financial corruption, it’s also media, even mental corruption, which is more extensive in the USA: when Brazilian leaders lose an election, they don’t accuse Russia.

So did Obama’s underlings cook the numbers? In light of the stupendous augmentation of the debt in the months prior to the presidential election, one can only be suspicious.

Augmenting the US National Debt, my dear Obama, at a ten percent annual rate, was trying to buy the presidential election. That’s how history will remember it. History will also remember that you tried to lower the American Republic to the status of vulgar Banana Republic, by claiming it was all Russia’s fault.

For years, the USA crowed that it was the world’s hacking master, even making Iranian nuclear equipment spin out of control (Stuxnet virus). Vast arms of the government masquerading as private entities, among them Apple, Facebook, Amazon, Microsoft, were hacking the world, and it was fine.

A real democratic republic and open society should never underestimate others’ propensity to mimic anti-democratic, anti-republican and vicious means!

This happened before: the Athenian empire behaved several times in terrible ways. And that was probably why Athens lost the Penopolesian war (Athens had stolen the Delian League treasury, and destroyed the island state of Melos, both for no good reason, among other exploits of demented cruelty unbound). Later, other Greek states imitated the Athenian ways, and Athens lost the war, and half of her population. She survived only thanks to Sparta (the ultimate ignominy!)

Behaving badly feels good, until on is found out by the public. Happy new year Obama and your sycophantic pro-plutocratic media!

Patrice Ayme’