Stimulus package is a joke, shows how broken Washington is

[dan_s]

Full of pork. Money that will wind up in their pockets

If nothing else, the $900 billion fiscal stimulus bill the President signed over the weekend is
an illustration of what is wrong with our political system. In a sane world, there would have
been a bipartisan agreement to exchange liability protection for some level of state and local
governmental support. Additional support would have been both targeted to the pandemic
itself and paid for. There would not have been billions of dollars sent to individuals and families
that have jobs/incomes and excess savings, an uncreative waste of resources. Incredibly, some
members are actually suggesting this bill (on top of the multi-trillion CARES Act that passed
this spring) is simply a “down payment” on additional stimulus early next year. Yet, the vaccine
rollout / post-holiday peak in case counts likely will bootstrap reopening efforts and trigger
a strong reacceleration in growth next year. This, along with previous and ongoing monetary
support, will render additional fiscal action superfluous, in our view. It doesn’t seem to occur
to anyone in Washington that if output rises above its non-inflationary potential, the Fed will
be required by law to tighten in a way that reverses said overshoot . In other words, monetary
offset. Yet, the taxpayers will still be holding the bag as debt ratios run up unnecessarily. Epic
fail.
Michael Darda, Chief Economist & Market Strategist - mdarda@mkmpartners.com