If You Bail Out Everyone, You Bail Out No One

t’s sad any of this needs to be said or written, but it cannot be stressed enough that government outlays are a consequence of growth that’s already taken place. The federal budget in the U.S. is the largest in the world, and the U.S. Treasury can borrow trillions more, precisely because Congress and Treasury are backed by some of the most productive people on earth.

Which brings us to a recent conservative editorial making a case for former Fed Governor Kevin Warsh’s call for the Federal Reserve to “create a new facility that could lend to companies hit by the economic shutdown.” Warsh walks on water in conservative circles, which may explain why what is so contradictory to economic logic is gaining so much traction on the right.

Indeed, as the same conservative editorial made plain, “state and federal leaders are shutting down the American economy.” Goodness, the editorial was titled “Financing an Economic Shutdown.”

The shutdown aspect of the lapse of reason we’re all suffering from politicians and those in their employ rates constant mention in consideration of conservative calls for a “new facility” to bolster businesses whacked by political ineptitude. Those businesses, and those in the employ of those businesses, would normally fund government outlays but for one problem: politicians are in the process of shutting down the economy for weeks, and perhaps even months.

Συνέχεια ανάγνωσης εδώ

Πηγή: aier.org