At precisely 9:26pm this past Friday night, May 15th, the House of Representatives in the United States passed the “Health and Economic Recovery Omnibus Emergency Solutions Act.”
For short, they call it the HEROES Act.
And yes, it’s as ridiculous as it sounds.
Bear in mind that Congress passed the first bailout bill– the “Families First Coronavirus Response Act” on March 14th. That set the taxpayers back $1.3 trillion.
Less than two weeks later, Congress passed the “Coronavirus Aid, Relief, and Economic Security Act”, or CARES, which cost a hefty $2 trillion.
A few weeks after that, they passed another half-trillion dollar bill, the “Paycheck Protection Program and Health Care Enhancement Act,” which, sadly, did not come with a catchy acronym.
Are you keeping score? In total that’s around $3.8 trillion in federal bailouts.
And now on top of that, the House just passed the HEROES Act, which adds another $3 TRILLION to that total.
If the HEROES Act becomes law, that will bring the total bailouts in the Land of the Free to nearly $7 trillion, more than 30% of the entire US economy!
The HEROES Act itself is extraordinary. At 1,815 pages and nearly 300,000 words, it’s more than twice as long as the New Testament.
And I spent several hours this weekend reading it.
With a high-sounding name like “HEROES,” I naively thought the focus of the bill is to take care of front-line healthcare workers.
But I was wrong.
HEROES hands over taxpayer money to everyone from the Fish and Wildlife Service to the National Endowment for the Humanities.
There’s money for school lunches, broadband Internet access in rural areas and tribal lands, prison phone calls, “environmental justice grants,” and pretty much anything else you can think of.
There’s a phrase they use in this bill over and over again: “to prevent, prepare for, and respond to coronavirus. . .”
For example, they’re giving the General Services Administration (GSA) $1 billion to modernize their technology… leading a rational person to wonder,
“Hey wait a minute– what does that have to do with Covid?”
Nothing. And that’s why they include those magic words– The GSA will receive $1 billion “to prevent, prepare for, and respond to coronavirus.”
Oh gee, then I guess it makes sense.
It reminds me of right after 9/11, nearly two decades ago. Back then the government could get away with anything they wanted. They just had to use the magic words “for your safety and security,” or “in the interest of national security.”
They were able to pass the most insidious laws and say the most ridiculous things. But as long as it was for your safety and security, it was all OK.
Today it’s the same thing.
If this HEROES bill passes, for example, the National Endowment for the Humanities will receive a bunch of taxpayer money “to prevent, prepare for, and respond to coronavirus.”
Wait, what? What does one thing have to do with another?
Nothing. It’s just an empty justification to spend all the money they ever wanted.
But astonishingly, even this doesn’t seem to be enough.
Last night the news show 60 Minutes aired an interview with the Chairman of the Federal Reserve, who expressed clear concern that all the government spending and all the federal reserve money printing so far might not be enough:
Reporter: “In terms of stimulus, has Congress done enough?”
Fed Chairman: “. . . I don’t think we know the answer to that. It may well be that the Fed has to do more. It may be that Congress has to do more.”
The interview was pretty extraordinary– the Fed Chairman didn’t bother sugarcoating what they’re doing–
Reporter: “Fair to say you simply flooded the system with money?”
Fed Chairman: “Yes. We did. That’s another way to think about it. We did.”
Reporter: “Where does it come from? Do you just print it?”
Fed Chairman: “We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.”
Reporter: “In terms of size, Mr. Chairman, how does what the Fed is doing right now compare to the unprecedented action it took in 2008?”
Fed Chairman: “So the things we’re doing now are substantially larger. The asset purchases that we’re doing are a multiple of the programs that were done during the last crisis. . .”
That pretty much sums it up–
The government is on track to have a nearly $7 trillion bill for Covid so far, while the Federal Reserve has already expanded its balance sheet by nearly $3 trillion.
And even with that bonanza of money, they’re still not sure if it’s enough.
They acknowledge that they’re simply [digitally] printing money, and that the size of the problem is MUCH bigger than the last crisis.
He then acknowledges later in the interview– sure there will be consequences to all the debt and money printing, but we’ll worry about it later: “This is not the time to prioritize that concern.”
So, on top of everything else, they’re flat-out telling you that there are going to be problems down the road… but they’re going to keep printing and going into debt regardless.
No one here is being subtle.
And you’re not some wild conspiracy theorist to think that there might be consequences down the road. The Federal Reserve is telling us that this is the case.
And they’re also telling us that they’re going forward with their plan to print money and facilitate government debt regardless of the long-term damage.
If that’s not a reason to own precious metals and real assets, I don’t know what else could be.