I'm reading up on the $1.9 trillion "stimulus." This caught me eye:
Biden's plan would set out $160 billion for a nationwide vaccine program that would help state and local governments get the vaccine into people's arms.
There are 328 million people in the US. $160 billion is just about exactly $500 per person.
Now, I am of the view that the government should have spent a lot more on vaccines, testing, public health and so forth, given the $5 trillion and counting it has cost the government, and more in lots GDP, jobs, years of school and so forth. This is likely the least bothersome line in the bill.
Still, has the US really gotten to the point of health care sclerosis and dysfunction that it costs $500 -- on top of money already allocated -- to give someone a shot?
It's actually two shots - so $250.00 per shot times two shots per person.
ReplyDeleteBut again, you are focusing on the wrong thing. Instead focus on how this package will be paid for.
You look at the $1.90 trillion stimulus package and say that is an awful way to spend money. I look at the $1.9 trillion stimulus package and say that is a great way to inject $1.9 trillion worth of equity into the economy.
ReplyDeleteSee Irving Fisher - Separation Theorem.
The firm's investment decision can be separated from its owners' consumption preferences — hard to see what that's got to do with anything being discussed here!
DeleteCoker,
DeleteSee:
https://en.wikipedia.org/wiki/Fisher_separation_theorem
"The investment decision is independent of the financing decision."
Investment decision:
Spend $1.9 Trillion in stimulus
Financing decision:
1. Raise taxes to recover $1.9 Trillion
2. Sell $1.9 Trillion in bonds
3. Print $1.9 Trillion in money
4. Sell $1.9 Trillion in equity
Choose door #4.
See U. S. Constitution, Article 1, Section 8
DeleteClause #1:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises...
Clause #2:
To borrow Money on the credit of the United States
Clause #5:
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures
Now where does it say that Congress MUST do any of these things?
Congress passes the spending bill for the $1.9 trillion in stimulus spending then refuses to raise taxes to pay for it, refuses to increase the debt to pay for it, and refuses to coin money to pay for it.
All of these actions are completely within the legal framework set by the Constitution.
In the event this happens, it would be up to the Executive Branch of government (Treasury Department) to execute the will of the Congress, and that leaves just one option - Equity.
Coker,
Delete“Men and nations behave wisely when they have exhausted all other resources.” - Abba Eban (1967)
This quote is often mis-attributed to Winston Churchhill who is rumored to have said:
"Americans can always be counted on to do the right thing…after they have exhausted all other possibilities."
Great line, but Churchhill never said such a thing.
> inject $1.9 trillion worth of equity into the economy.
DeleteEquity _from_ someplace out of the economy? Fishes and loaves from Jesus? Manna from Heaven? A genie in a magic lamp?
Stephen Grossman,
Delete"Equity _from_ someplace out of the economy?"
Equity quite simply is a risk bearing asset (for instance equity shares in a company). And so, individuals that are willing to take a little risk - for instance paying their anticipated taxes ahead of time at a discount - should be able to purchase equity from the U. S. Treasury. Where would the money come from - here is a start:
https://fred.stlouisfed.org/series/WDDSL
Stephen Grossman,
DeleteAHAH, I caught the reference now (took me a few minutes).
From the Gospel of Thomas:
"Jesus said: If your leaders say to you Look! The Kingdom is in the heavens! Then the birds will be there before you are. If they say that the Kingdom is in the sea, then the fish will be there before you are. Rather, the Kingdom is within you and it is outside of you."
This was reworded in the movie Stigmata (Patricia Arquette, Gabriel Byrne) to say:
"The Kingdom of God is inside/within you (and all about you), not in buildings/mansions of wood and stone. (When I am gone) Split a piece of wood and I am there, lift the/a stone and you will find me."
And so I would say to you - Equity does not solely exist in buildings of wood and stone located in lower Manhattan, it exists wherever you can find individuals that are willing to take risk.
Yes I know, pretty corny, but the parallel holds.
The simple answer is that they have no intention of spending the money. It will sit at HHS and be used as a slush fund to pay for something that they could not possibly get Congress to pay for.
ReplyDeleteSimilar to the way George Bush paid for the wars in Iraq and Afghanistan?
DeleteSo the best you can do to counter a claim of corruption and circumventing the proper process to allocate funds is to claim that other people have done it as well?
Delete@FRestly is admitting that I am correct. I will take it. I was not trying to moralize about this, just to explain why they are doing it.
DeleteAnonymous,
DeleteI am not countering anything. I am saying that the Democrats in Congress would likely look at previous behavior by Republicans and adopt a tit-for-tat mentality regarding policies.
How many impeachments have we had in the last 30 years compared to the 200+ years prior? That should tell you all you need to know.
That is why we need a legitimate 3rd political party in the US - to keep the lunatic fringe from both parties at the edges of policy decisions rather than front and center. Dr. Henry Kissinger understood this with triangular diplomacy.
We used to have that (sort of) with a truly independent central bank - until Bernanke and Paulson came along and blew that all to smithereens.
The next debt ceiling vote by Congress is in July of 2021 I believe. Suppose Congress passes the $1.9 trillion stimulus bill and then refuses to raise taxes or the debt ceiling to pay for it? Guess what happens next.
ReplyDeletePer the U. S. Constitution, the U. S. Treasury under Janet Yellen is responsible for coming up with the funds to make up the difference - enter government equity. The only question, is Mrs. Yellen ready to step up to the plate.
John, Thanks for doing the division. Sometimes all you need is a little 3rd grade arithmetic to see what is really happening. I confess that I had simply accepted the $160 billion as reasonable and necessary without thinking. My guess is that this is a backdoor way to shovel more Federal dollars to help bailout state governments, as the $500 per person for vaccination seems way over-the-top.
ReplyDeleteDoes that include the cost of the vaccine, and if so what is it? If it's just the logistics of distributing vaccine and administering shots then something's not working.
ReplyDeleteLast I read vaccine is sub $20 per dose [https://www.nytimes.com/2020/12/18/upshot/coronavirus-vaccines-prices-europe-united-states.html?]. I imagine some of the cost is the logistics of shipping Pfizer at temperatures of -70C, that is probably expensive?
DeleteWhat do we know about the process whereby the the figure of $160 billions was arrived at as a budget figure? Until that data is set down before us, it is premature to jump to the conclusion that it costs $500 per person to deliver the vaccine doses.
ReplyDeleteMy vet would probably charge $40 bucks to give me the shots and be happy about it. Me, too.
ReplyDeleteIt’s beyond infuriating. I just had the first shot and when I was done my reaction was “That’s it?” One tiny needle in your arm. Just mail them or Amazon them whatever. 50% of the US can do it with themselves or have a friend / partner inject it
ReplyDeleteAll transactions are more expensive than we think. That is why the marketplace is eventually surrounded by desert.
ReplyDeleteJohn, I am pretty sure you are faking your surprise.
ReplyDeleteAs the old joke goes: how many government employees are required to change a light bulb? 20 ... at least one for any of the different departments involved in the process.
Inefficiency is expensive
Same old, same old ...