The clock is ticking for millions of Americans, yet all our leaders just bicker...
On Monday, Senate Majority Leader Mitch McConnell unveiled the Republican coronavirus relief plan – the HEALS Act. This is good news for the millions of Americans currently unemployed because their supplemental federal unemployment benefits expire this week.
Some of the details of the relief package include...
- Cutting the $600 weekly federal unemployment supplement to $200 a week through September, when the payment will then combine with state benefits to replace 70% of previous wages (which I think can be a positive to get folks back to work)
- Direct payments of $1,200 and $2,400 to most individuals and couples, depending on their income
- $190 billion for small-business loans... $105 billion to help schools reopen in the fall... $26 billion for COVID-19 vaccines and therapeutics... and $16 billion towards COVID-19 testing
That adds up to a $1 trillion package. (It's important to emphasize trillion because it is so much more massive than the millions or billions that we normally hear about that it's nearly impossible to imagine. One billion seconds is 32 years. One trillion seconds is 32,000 years.)
And this new $1 trillion package is on top of the multitrillion-dollar deal from earlier this year.
Before you cheer about additional stimulus, there's still a lot of work to be done in Washington.
Senate Democratic Leader Charles Schumer and Speaker of the House of Representatives Nancy Pelosi met for almost two hours with Republican leaders Monday night. Pelosi called the GOP plan "pathetic" and said it "isn't serious."
Here's what Schumer told reporters Monday night...
We are somewhat frustrated. We had hoped there would be a bill, and instead in the Senate they've put little pieces here and there and everywhere. It's pretty clear they don't have 51 votes in the Senate for a proposal.
If you've been following politics for any amount of time, you'll know that things rarely go as planned. There's always back and forth.
Republicans and Democrats may not come to an agreement in the next few days, but they will eventually. There would be too much backlash if they didn't.
But what you should really focus on is the absurd amount of money being printed today...
The Federal Reserve's balance sheet has ballooned to $7 trillion as it's helped support the economy. That's up from $3.8 trillion a year ago.
And many analysts see that figure climbing up to $8 trillion in the months ahead.
Businesses are taking on massive amounts of debt as well. According to data from CreditSights, corporate liabilities were at an absurd 135% of GDP this year. It was only 105% in 2007.
Interest rates are so low today that many businesses – even those that should probably go bankrupt – can remain open because they "kick the can down the road." But as we know, that can't last forever.
To say our national response to the coronavirus has been unprecedented is an understanding. The mountain of debt our country faces is scary.
But although the government is spending at an alarming rate, it's not a one-time anomaly...
America's politicians, Republicans and Democrats alike, have abandoned any pretense of budgetary restraint. The truth is that every politician loves to give away money and jobs. There's no better way to satisfy a voter from either party.
Under President Donald Trump, deficit spending has grown. He has asserted powers that no president before has claimed, tilting more toward authoritarian than small-government conservative.
At the same time, the Democratic Party has moved left and proposed larger and larger programs like Medicare for All and student-loan forgiveness.
Whatever your personal politics – whether you think big government is a constructive force... view a massive stimulus as a necessary evil... or abhor the unrestrained spending that politicians of all stripes embrace – you have to accept the fact of this immense deficit spending. It's happening. And it will continue to happen.
My good friend and Stansberry Research founder Porter Stansberry is also keeping a close eye on the government's spending.
As he has said before, eventually someone has to pay the tab – and a massive amount of wealth can be both lost and gained as that happens.
Today, Porter says we've reached a tipping point for a reckoning...
And because of it, he will sit down for a special video event at 10 a.m. Eastern time on Thursday at his farm just outside of Baltimore.
It's a can't-miss event... Porter will explain exactly how the financial system will collapse. And he'll talk about how you can make huge gains because of it.
He thinks it could be the biggest prediction of his career.
This Thursday, July 30 event is free for all subscribers, but you must sign up in advance by clicking here.
What We're Reading...
- Senate GOP, White House propose cutting $600 unemployment checks to $200 in coronavirus relief plan.
- GOP's relief package hits a wall.
- Something different: This is the MLB's worst nightmare.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
July 29, 2020