Who Does The Coronavirus Stimulus Bill Help Most?
Marlon Weems currently consults as a subject-matter expert specializing in electronic trading and capital markets structure. He previously held leadership positions at several Wall Street investment firms.
Last week, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $2 trillion is the most massive spending package in US history.
The historic rescue package contains much-needed financial relief for small businesses and the forcibly unemployed.
Unlike the 2008 financial crisis bailout, the bill’s modest oversight provisions keep the CARES Act from being an opaque giveaway. Still, the Act’s fine print reveals that the GOP Senate’s focus centered on serving wealthy interests and not the average American.
Around the same time, Federal Reserve initiated what is known as “quantitative easing,” or QE. In simple terms, this is the Fed’s break-the-glass way of ensuring that the market functions properly during times of economic stress.
Compared to the 2008 financial crisis, the Fed has moved with unheard-of speed, this time pledging unlimited amounts of cash, to stabilize the credit markets and to facilitate small business lending, as well as other areas of the financial markets.
Perhaps the most amazing feature of the recent chain of events is the total absence of “How will you pay for it?” language that normally accompanies virtually every congressional spending effort, such as those related to healthcare, infrastructure, or climate change.
If there is one positive from the global pandemic, it is that now we have undeniable proof that the pay for - the requirement to offset government spending by cutting something else - was nothing more than a Republican red herring all along.
To put it in layman’s terms, it was a load of bullshit.Looking to make a difference? Consider signing one of these sponsored petitions:
One thing the CARES Act shows is that no matter how bad things get for regular folks, the GOP’s first response is to protect the plutocracy. For the GOP, America’s most desperate moment is just another opportunity to help plutocrats back the proverbial truck up to the government feed trough.
Representative Alexandria Ocasio-Cortez (D-NY) summed it up this way:
“What did the Senate majority fight for? One of the largest corporate bailouts, with as few strings as possible, in American history…the option that we have is to either let them suffer with nothing, or to allow this greed and billions of dollars - which will be leveraged into trillions of dollars - to contribute to the largest income inequality gap in our future. There should be shame about what was fought for in this bill and the choices that we have to make.”
Whenever you may think of AOC’s politics, she hit the nail on the head.
Sure, the CARES Act protects the stock market and businesses, but how much does it help people with no ability to earn a living? Not much.
Senate Republicans shot down proposals to maintain the payments until things return to normal, or even for a few months. Also missing from the bill are emergency suspensions of rent or a moratorium on evictions.
Given the dire situation, any assistance is better than nothing. But for most families, the one-time check from the government won’t go very far. And the money won’t arrive for weeks.
Consider this: a married family of four making less than $75,000 stands to receive a one-off payment of $3,400. Also, those laid off due to the pandemic can file for increased unemployment benefits under the Act.
The average price for a three-bedroom apartment is nearly $2,000. A two-bedroom flat is only a few hundred dollars less.
With rent, utilities, and payments coming due for most people this week - not to mention the weekly food bill - many may find themselves on the streets before their check arrives.
To make matters worse, with state unemployment websites crashing left and right, there is no telling when the additional federal money will hit your bank account.
In fact, a few GOP senators were so concerned the CARES Act may give too much help to jobless Americans, spawning an underclass of malingerers too lazy to work, that they threatened to hold up the bill’s passage.
Contrast the CARES Act’s funding for individuals with the grab-bag of corporate goodies buried in the bill. Most of the media focus is on the $500 billion set-aside for businesses plus money for the airlines.
Dig deeper, and you’ll find pork that benefits hoteliers like The Trump Organization, money directed at Boeing, a company that was close to bankruptcy before the pandemic even started. Republicans even managed to sneak in a few extra tax breaks for real estate investors – like President Trump.
But before the ink is dry on the bill, there is already controversy. In a “signing statement” issued after signing the bill into law, the president indicated his intention to override the bill’s limited oversight requirements.
If there is any good news on the horizon for the 99%, it is the speed with which the levers of government have responded. Chances are there is another tranche of coronavirus aid on the horizon.
So buckle up America. Because with the Fed predicting nearly 50 million in job losses and 32% unemployment by the time the cavalry arrives, it may be too late.