The progressive democrats in Washington D.C love stimulus packages. Progressive congresswomen Rashida Tlaib of Michigan, Ayanna Pressley of Massachusetts and Pramila Jayapal of Washington are in favor of “cutting a check” for $2,000 to every person followed by recurring $1,000 payments every month, for one year after the end of the pandemic. In Tlaib’s proposition, which is called the Automatic Boost to Communities Act or the ABC Act, she describes “every person” as
a.Dependents, so a couple with two children would receive 4 x $2000 = $8000 in total.
b.Non-citizens, including undocumented people, permanent residents, and temporary visitors whose stay exceeds three months.
c.Individuals who do not have a bank account, social security number, or permanent address
d.People living in unincorporated territories or protectorates and Americans living abroad.
The ABC Act states this package (which doesn’t have a total cost) would be a “money-financed fiscal program for which no additional U.S. debt would be issued.” The act states, the Treasury Secretary would direct the U.S. Mint to issue two $1 trillion platinum coins. Afterwards, Congress would direct the Federal Reserve to purchase the newly issued coins at face value. The Federal Reserve would complete the purchase by crediting the U.S. Mint’s account at the Fed with $2 trillion in reserves.
As outrageous as this sounds, let me put in context using historical data that shows how outrageous it really is. Thebalance.com listed the average unemployment rate for each year from 1929 to 2019. According to those numbers, for that 90 year span the USA has had an unemployment rate under 5% only 29 times or 32% of the time. Earlier in March the official unemployment rate came out at 6.2%. During that same 90 year span the unemployment rate was under 6% 49 times or 54% of the time. This doesn’t sound like uncharted territory to me. There were no stimulus checks or ABC acts back then.
Jay Powell, the Federal Reserve Chairman stated that unemployment rate is actually around 10%. My question would be, if the government knew the unemployment metric that they used for the past 10 years is inaccurate, why wouldn’t they change it? Is the government hiding something from us? That’s up to you to decide.