Stimulus (n): a thing or event that arouses activity or energy in someone or something; a spur or incentive
This week the first of the Coronavirus stimulus checks are being sent. Most Americans are looking forward to padding their sinking bank accounts with this extra influx of unexpected cash.
Except…
The purpose of a stimulus is to inject much needed capital into failing businesses by giving consumers a wad of cash to spend, thus saving these businesses from ruin. However, with most businesses closed, most Americans will be using the boon to pay off bills rather than spend it on something that will spur the economy.
So, what exactly is the purpose of providing a stimulus at this juncture ?
In most cases of economic turmoil, such as our current situation, it would make sense to spur spending by giving people extra cash that they can pour back into businesses to get the economy moving again. But these are not “most cases”.
For Donald Trump it means one thing: a chance to save the one thing he has left to brag about: the economy. While he can’t be entirely blamed for the enormous about-face in the recent stock market disaster, he likewise can’t continue to take credit for the eleven-year bull market when he was only in charge for three of those years.
Because the bull has turned into Trump's bear market.
Taxpayer-Financed Direct Mail Campaign
Like everything he does, Trump will refuse to accept responsibility for anything bad that happens, while attempting to bask in the glory of anything positive. Case in point, Trump insisted that his name appear on the stimulus checks. That way, he can use it as a campaign tool where he dupes his base into believing HE is solely responsible for this government largess in their time of need.
“I don’t know too much about it. But I understand my name is there,” Trump said Wednesday. “I don’t know where they’re going, how they’re going. I do understand it’s not delaying anything, and I’m satisfied with that. I don’t imagine it’s a big deal. I’m sure people will be very happy to get a big, fat, beautiful check and my name is on it.” (Emphasis added)
That amounts to a taxpayer-funded political direct mail campaign, one that would otherwise cost millions. Once again, it is Trump pulling a Houdini act, escaping disaster and turning it to his advantage.
While many people look forward to this unexpected windfall, this is only a temporary fix. What will happen if the Coronavirus pandemic lasts past next month? Will there be another band-aid check coming?
Long-term impact?
History has shown us that printing large amounts of cash will result in a period of hyper inflation, where the limited amount of goods available will cost more and more based upon the laws of supply and demand. The resulting economic turmoil tore countries apart in Spain, led to the rise of Nazi Germany and, most recently, was at the center of the political upheaval in Venezuela, where hyper inflation is at a staggering ten million percent.
But what does Trump care? During the campaign, he will claim credit for personally propping up the economy in a time of need. All he has to do is hold up one of the stimulus checks embossed with his name.
For Trump, it’s a win-win. If he succeeds in getting re-elected, he won’t have to worry about another race, since he’s term-limited. If he loses, his Democratic successor, likely Joe Biden, will inherit the disastrous economy that Trump left behind.
So, when is a stimulus not a stimulus? When the result is the destruction of our country.