The Patriotic Dissenter

Will the $2.2 Trillion Economic Relief Package Be Enough?

The United States Senate, by a vote of 96-0, approved a $2.2 trillion dollar coronavirus pandemic aid initiative on Wednesday, with Speaker Nancy Pelosi planning to push the bill through the House of Representatives on Friday. From there it will be sent to President Trump for his signature, and then the economic relief package will become law.

It’s by far the largest economic relief bill in American history, but that was to be expected, especially when you factor in the time value of money. A majority of the funds will be geared towards financial stimulus, with $500 billion set aside for sending direct payments of $1,200 to every American that earns less than $75,000 per year. It is expected that these checks will take three weeks to reach these Americans in need, so billionaire businessman and entrepreneur Mark Cuban is trying as hard as he can to get this money to the people who need it faster.

Another $500 billion of the package will go to the Federal government, $150 billion for state and local governments and $100 billion for hospitals. The bill also includes a lot of added expenditures for items not at all related to the COVID-19 pandemic including: $25 million to the Kennedy Center for the performing arts, $20 million to two D.C. area colleges, $75 million for the arts and humanities and $350 million in migrant and refugee assistance.

There were a lot of losers in this bill, including the U.S. Post Office, which got about half of what they were asking, and the oil and cruise industries, which didn’t receive much help at all.

The New York Times has a comprehensive Q&A on the relief package bill, which has of course, received a lot of criticism from both sides of the aisle. The left points out the lack of oversight on Trump, and what resources could be allocated to his family. Given his notorious history of nepotism, at a level on par with a banana republic autocrat, this is understandably concerning.

The right is drawing attention to Pelosi’s obtaining funding for non-essential and extraneous services, at a time when the focus should be on expanding help for the jobless, and provide hundreds of billions of dollars to small businesses adversely impacted by the coronavirus pandemic.

So will it be enough to save us from an economic depression or a really severe recession? No one really knows for sure, but on Thursday the U.S. jobless claims numbers came out and they surged to an all-time high.

This past week saw 3.82 million Americans filing for unemployment insurance, with just 282,000 workers filing a claim the week before. Meanwhile we learned on Thursday night that the U.S. surpassed both Italy and China for the most COVID-19 cases in a single country.

No matter what happens we can certainly expect another three to four months of extreme economic disruption. Over the next 6-8 weeks things will get very uncertain as we see the macro impact and how that all plays out. More numbers from key indicators will be coming out over the weekend, and hopefully we don’t see another negative surge.