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Why is President Trump Bailing Out His Dishonest, Power Freak, Democratic Rivals?

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Via Economic Policy Journal


After buying into the coprolite being flung by the very curious Anthony Fauci, President Trump mismanaged the optics of the COVID-19 threat and sent most of the nation into hysteria.

His rivals in the Democratic Party took advantage and charged at every turn that he wasn’t doing enough and so he responded with doing things that make no sense in terms of sound health policy, from running the wrong kind of sampling tests to determine how serious a threat COVID-19 is to buying more ventilators for the nation, ventilators that Trump should have been advised early on were an improper treatment the way they were being used and mostly doing nothing but killing those put on them.

Trump’s economic policy has been as equally disastrous and actually may do more harm in the long run than his hysteria triggering COVID-19 actions.

His Democratic rivals have shut down large swaths of the country and they have been only able to do so without pitchfork revolutions because Trump has bailed them out with orders to finance nearly all those who have been hurt by the lockdown. And he is paying Wall Street a good chunk to distribute some of the cash to those on lockdown. Cash the government doesn’t have and so is simply being printed out of thin air by the Federal Reserve Board.

As I point out in the EPJ Daily Alert, current Fed money supply printing is at levels we haven’t seen in decades and there is no indication that it is going to stop anytime soon. There is a lot more money that Trump is ordering to be spent.

Robert Aro reports:

Last Thursday, after reviewing 2,200 public comments regarding the MSLP, the Fed decided to lower the minimum loan amount from $1 million to $500,000, allowed lenders to retain a 15 percent rather than 5 percent share for certain loans, and increased eligibility to companies with an annual revenue of up to $5 billion instead of $2.5 billion. The $600 billion facility still has yet to open. But when it does, and if it gets fully funded, it will expand the Fed’s balance sheet by approximately 10 percent.
The PPP could also expand the balance sheet by this amount, considering that the program started at $349 billion and has already grown to $670 billion. The same day as the MSLP release, it was announced that the PPP would expand to work with smaller nonbanks such as those in the farm credit system and community development institutions. The April 27 to May 1 US Small Business Administration Report showed that in the second round of funding there were over 2 million applications approved for $175 billion. This means that there is still a couple hundred billion dollars left which should be exhausted shortly. Given the number of approvals for these forgivable loans, would anyone be surprised if the program were expanded for a third time?
We can only wonder. But as a CNN interview with Larry Kudlow revealed, the top economic advisor to the president said that they might consider getting additional money for the PPP since:

This has been an extremely popular and effective program, no question about it. You know, keeping folks on the payroll is so important….we will be looking at that.

The Fed’s most recent balance sheet update shows that only $19 billion from the PPP Liquidity Facility has been utilized thus far; therefore, we will continue to monitor this amount. Unfortunately, it could reach $600 billion in the months ahead. Both programs are unique because the public will be able to directly participate compared to other programs, in which most cannot, such as various Fed asset purchases, lending, and bond programs.
However, a third program might include Main Street as well. This too has been expanded as of last week: the $500 billion Municipal Lending Facility (MLF). The population requirements were lowered to accept cities with 250,000 residents (formerly 1 million) and counties with 500,000 residents (formerly 2 million). This may spawn more grant programs and other “investments” that could sweep the country and trickle down to members of the public.

Between the maximum capacity of these three programs, the Fed may contribute a $1.7 trillion increase to the money supply. How big the balance sheet will be by the time life returns to normal is anyone’s guess. Also keep in mind that the effect of the banks later pyramiding this money is rarely ever discussed.

Yes, Trump is in way over his head. He triggered a panic for no good reason and now he is bailing out, to the tune of trillions of dollars, those that want to make him look like an incompetent.

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What a disaster. What a clown. What an incompetent.

RW


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