Thomas Barkin joins Minneapolis Fed President Neel Kashkari in the free money call.
Barkin says the Economy Faces ‘Sinkhole’ Without More Fiscal Support.
“Four months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate. Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate,” Barkin said in webcast remarks to the Northern Virginia Chamber of Commerce. “If Congress takes support away too abruptly … the unemployed, their landlords, the places they shop will then feel the full brunt.”
This is a second attempt by a Fed president to get Congress to extend $600 weekly unemployment checks.
Yesterday I commented Fed’s Kashkari Urges Congress to Hand Out More Free Money
“So while historically we would worry about racking up too much debt, we’re generating the savings ourselves. That means Congress has the resources to support those who are most hurting,” he said.
“Right now the U.S. can fund itself at very, very low rates. Congress should use this opportunity to support the American people and the American economy.”
“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it,” Kashkari said.
We Owe Ourselves
We owe the money to ourselves, so let’s lock the economy down for six weeks and see what happens.
In other news, I put a signed “I Owe Me” $1,000,000 note in my piggybank today so I have an extra million to spend at 0% interest, the amount of interest I am charging myself.
Six Week Lockdown
Kashkari proposes the path Melbourne Australia has taken.
“Where you slept last night is where you’ll need to stay for the next six weeks,” said Daniel Andrews, premier of Victoria.
Only one person per household will be allowed to leave their homes once a day — outside of curfew hours
For details, please see Millions Locked Down Under Draconian Covid Rules in Australia.
The Fed hollers every time Trump or Congress meddles in monetary policy, but the Fed repeatedly meddles in fiscal policy.
And here’s a new one: The Fed is willing to interject its beliefs about medical policy as well.