Fiscal stimulus is different from the Federal Reserve's unlimited QE. It belongs to the government's financial expenditure, and the borrowed money has to be repaid. 2.2 trillion will not only cause inflation, but also increase the fiscal deficit and increase the national debt. If it is serious, it will affect the sovereign credit of the US dollar and lose its status as an international central currency.
The stimulus plan includes:
$504 billion is used for emergency assistance of large enterprises, $377 billion for emergency assistance of small and medium-sized enterprises, $290 billion for direct payment of one-time checks to eligible taxpayers ($65.438+0.200 for each adult and $50 for children), $260 billion for increasing unemployment insurance, $654.38+0.8 billion for expanding health care expenditure, and $654.38+0.
From the content point of view, policy makers mainly hope to delay and prevent enterprises and individuals from going bankrupt during the epidemic through financial assistance, and hope to promote economic recovery after the epidemic and cooperate with the unlimited QE of the Federal Reserve to provide protection for the real economy.
Now the situation is clearer. On the one hand, the combination of money and finance provides liquidity and boosts confidence in the short term; On the one hand, if it can be controlled in time, the development of the epidemic will not be a big problem. If it is not controlled in time, it will be difficult to prevent the economy from entering recession, and there will be more holes to be filled.
Therefore, it is not enough to stimulate. We should combine epidemic prevention with stimulation.
The most direct impact is the increase of fiscal deficit. At present, the total debt of the US government has exceeded $23.5 trillion. In fiscal year 20 19, taxpayers paid $574.6 billion in debt interest, and will pay $229 1 billion in fiscal year 2020.
The newly increased expenditure of $2.2 trillion will undoubtedly further widen the fiscal gap, and deficit ratio will rise to the highest level since the 2008 financial crisis, which may take years or decades for taxpayers to make up.
At the same time, the impact of the epidemic has led to an increase in the number of unemployed people, a decrease in tax revenue and an increase in financial pressure. By endlessly borrowing money and printing money to support economic development, the tax burden will be passed on to the next generation, which will lead to hyperinflation and bankruptcy in serious cases.
Corresponding to the dollar, the sovereign credit rating was downgraded until it finally lost the low level of international settlement and reserve currency.
Yes, the whole world has been dragged down the road of devaluation.
In the early stage, due to the lack of liquidity of the US dollar, all asset classes were redeemed, which led to a high US dollar index and the market panic. At the Federal Reserve, it continued to provide dollar liquidity, and finally showed the ultimate broadsword, not just dollar liquidity. The market has finally stabilized.
The American stock market is related to America's greatest wealth. A large number of rich people subscribed for funds, which frightened all investors on the way to a sharp decline in US stocks. Causing short-term dollar liquidity shortage. This shortage is easing, which also makes American stocks breathe a sigh of relief. But the investment market has become a bear market, and the United States, a country that borrows money crazily, is still desperately printing money. The end result is nothing more than trying to drag the world into the water and let people all over the world who need dollars pay the bill.
However, their debts are too deep. In the United States, the national government has closed its doors for lack of money many times, and the government's foreign debt exceeds 23 trillion, and it is still increasing. It is more and more difficult to pay interest every year, and it is impossible to borrow it indefinitely. Sooner or later, you will be dragged to death by debt.
Inflation in our country has also soared recently. In February, CPI exceeded 5%. In March, it did not cut interest rates according to the world situation. When the data came out in April, the CPI dropped, which gave us room to cut interest rates. A flood of dollars into China will not give them too many arbitrage opportunities. After we cut interest rates, there will be further pressure on prices, especially food.
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The American stock market is related to America's greatest wealth. A large number of rich people subscribed for funds, which frightened all investors on the way to a sharp decline in US stocks. Causing short-term dollar liquidity shortage. This shortage is easing, which also makes American stocks breathe a sigh of relief. But the investment market has become a bear market, and the United States, a country that borrows money crazily, is still desperately printing money. The end result is nothing more than trying to drag the world into the water and let people all over the world who need dollars pay the bill.
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There is no doubt that the American economy has been in crisis. COVID-19 has accelerated the decline of the American economy, and this kind of economic stimulus can be said to be a last resort. Otherwise, the American economy will have a big problem and the unemployment rate will rise sharply.
However, the problem now is that such a large-scale stimulus will inevitably leave a root cause for the future development of the United States and lead to hyperinflation. Therefore, what the United States needs to do now is to control the epidemic as soon as possible, carry out structural reforms, ease the unemployment rate in the United States, and find a long-term and stable development path.
The above shared answers to this question are all personal opinions and suggestions. I hope the answer to this question I shared can help you, and I hope you will like my sharing. If you have a better answer to this question, please share your comments and discuss this topic.
Finally, here, I wish everyone a good start, a good life, a happy life and a happy growth in the new year. Thank you!
In this COVID-19 epidemic relief plan, in the 2 trillion super relief plan, ordinary people can get 550 billion US dollars (unemployment insurance+family cash subsidy), 349 billion small enterprises, 500 billion large companies (including special assistance from airlines), 22 10 billion corporate tax concessions (shared by large and small enterprises), and about 490 billion national financial, medical and epidemic prevention and veterans subsidies.
The two trillion dollars belong to the US Treasury. Logically speaking, it cannot be said that the Fed is printing money. The US Treasury needs to issue treasury bonds to raise funds. At present, the yield of US Treasury bonds in the market is very low, and the debt interest can be relatively low; In the future, it is entirely possible for the Fed to buy US debt and inject liquidity into the market.
Bill Gates opposes Trump's Easter start, and he believes that it needs to be isolated for at least 6 to 8 weeks; Biden asked Trump to shut up and listen to the opinions of experts; Pelosi also said that according to experts' predictions, when the epidemic is over, the US economy will naturally recover.
The financial deficit in the United States is serious, and in the event of sudden accidents or large-scale natural disasters, the financial resources to help the society are insufficient; We should start work as soon as possible this time, and the subsidy for each family is only enough for one month. If it is delayed for another month, the people will put a lot of pressure on the government.
Will Trump's signing of this $2 trillion only lead to currency depreciation and inflation in the United States? Will it affect other countries? Why?
The answer is yes, the whole world pays for inflation.
First, we need to know the hegemony of the dollar. As the world's central bank, the Federal Reserve can regulate global financial markets and capital prices through quantitative easing and other policies.
Secondly, dollar hegemony, printing the world currency dollar, and enjoying seigniorage from all over the world.
In the end, the United States printed too many dollars for the world to pay, and inflation is also the inflation of the world. All the consequences are shared by the whole world.
I think Trump signed $2 trillion to flow to the world only for the world, which will cause some inflation. The problem is that the United States has not stopped investing so much dollars. At the beginning of this month, the Federal Reserve launched $700 billion, and there should be more after that.
It is reported that in the last month, the Dow Jones Industrial Average of US stocks dropped from nearly 30,000 points to more than18,000 points, and about 15 trillion US dollars were withdrawn from the United States. In order to save the market, the U.S. government printed dollars, unlimited monetary easing. This printing speed is like pouring water into milk. Milk is getting thinner and thinner under the condition of continuous water injection. With the continuous injection of dollars into the world, the wealth of the people of the world will be diluted, and the same amount of dollars can't buy the same amount of goods before printing money. This is inflation.
Whether inflation is moderate or develops into hyperinflation depends, of course, on the development of the epidemic. From the most pessimistic point of view, the epidemic situation in the United States has not been well controlled, which has seriously hit the American economy and triggered a great recession in the United States, thus causing soaring prices. Only the US dollar is the world currency, and the epidemic situation is the country with the most confirmed cases in the world. It's unfair that people all over the world have to pay for unfavorable control. Therefore, how to prevent the dollar from harvesting wealth is an urgent task for governments and people all over the world.
According to reports, on the 27th local time, the US House of Representatives passed the largest economic stimulus bill in history, and Trump officially signed the stimulus bill with a budget of more than 2 trillion US dollars.