Magic money machine

Money MakerThe US is plowing $6 trillion of imaginary money into a faltering economy to blunt the effects of the great WuFlu Panic. For context, that sum is larger than the annual GDP of Japan and way larger than US federal revenue in FY 2019 of $3.5 trillion:

An emergency stimulus package to bail out the US economy amid the coronavirus pandemic will total $6 trillion — a quarter of the entire country’s GDP, the White House said Tuesday.

Trump administration economist Larry Kudlow said the package would include $4 trillion in lending power for the Federal Reserve as well as a $2 trillion aid package currently being hammered out by Congress.

“This package will be the single largest Main Street assistance program in the history of the United States,” Kudlow said at the White House coronavirus task force briefing Tuesday evening.

Included in the package is Congress’ almost $2 trillion emergency bill, which, when passed, will issue direct checks for American families, bailouts for the airline industry and a $350 billion loan program for struggling small businesses.

The other $4 trillion will allow the Federal Reserve to make huge emergency bailouts of whatever entity it chooses — a measure that was used to prop up Wall Street firms from collapse during the 2008 financial crisis.

This raises interesting questions about the nature of money. What does it even mean at this point? What is a dollar actually worth, if the US can just conjure a quarter of its GDP out of thin air? Why even collect taxes? This mega-bailout may stabilize things for a while, but our fake economy seems to be on its last legs.

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