The place is all of the pandemic reduction cash going?

Morton Marcus Photo submitted

Round II of COVID aid has been allocated and billions have already been sent. Did you receive $ 1,400 for each person in your household? Unless you had less than $ 80,000 in income ($ 160,000 for a couple), you haven’t seen these checks.

“I don’t need the money,” says a friend in Elkhart of our nationwide Zoom connection. He’s right. But what harm does the money do? If he doesn’t spend it or give it away, the money isn’t just sitting in his bank. The bank will lend to individuals, businesses, or state and local governments to be issued according to their capabilities and needs.

“Doesn’t the US have to raise taxes to pay off these new debts?” calls for a student in New Albany. “We have to pay it back with interest one day. It will put a strain on my back in the future. “Are you paying back to whom, when? Who was this money borrowed from? No foreign or domestic investor has loaned this money to the US Treasury Department.

That money is just an electronic entry in the Federal Reserve System’s ledger books. There is no increase in conventional debt and no interest payable to holders of such debt.

“Won’t it make the dollar cheaper overseas?” asks a woman in Sullivan. No, the world is in a massive recession. Our dollars are welcomed by nations exporting to us and welcoming us as COVID safe tourists. Our incentive will revitalize their economies.

“We are in danger of a massive surge in inflation,” explains a participant from Monticello. Where is the evidence? Suggestion Round I have not given us macroeconomic inflation except in limited corners of the economy.

“Housing! Lumber! Gasoline!” counters a gentleman from Toad Hop. Yes, the demand for housing increased when some people started working from home. They wanted more or different space and could afford low-interest mortgages. This demand for new structures or remodeled existing houses led to an increase in wood prices. It is proof that the initial aid funds were as intended. it helped many workers get or keep jobs.

Oil prices are a different story. They are dependent on the needs and whims of a few nations with price increases after sharp price decreases.

“This new incentive money is being wasted on frivolity,” shouts Hobart.

“It will only increase laziness and undermine virtuous work,” proclaims a shadow figure from Greenfield.

“It’s a communist conspiracy to undermine capitalism,” insists a conspiratorial voice. Next visionary Zoomer affirmed: “It is a capitalist conspiracy to increase consumption and undermine socialism.”

I suggest to the group that we now leave this session and our prejudices and move on to what we are personally observing, rather than just gossip disguised as news. As a last resort, we could see what the available data is telling us.

Morton Marcus is an economist. Reach out to him mortonjmarcus@yahoo.com. Follow his and John Guy’s views on Who Gets What? Wherever podcasts are available or at mortonjohn.libsyn.com. Submit comments to dr-editorial@greenfieldreporter.com.