It’s a small club and you ain’t in it. Our rulers care a hell of a lot more about their buddies in state governments than they do about you. From Tyler Durden at zerohedge.com:
Joe Biden is giving so much money to states as part of the $1.9 trillion stimulus package that they’re set to receive approximately six times more money than estimated tax revenue shortfalls across the country, according to Bloomberg.
While the package carves out nearly $200 billion for state governments, the cumulative tax revenues which have disappeared in the current fiscal year are just $31 billion. “In other words, that money could make up for that loss and be plowed back into states’ economies, such as their own version of relief checks, infrastructure projects and more, depending on the federal guidelines around the aid.”
In short – states, assuming they don’t squander the funds (who are we kidding?), could play a pivotal role in accelerating the recovery – assuming the money actually stimulates jobs and/or ends up in the hands of consumers. The funds would also allow for the unwinding of various budgetary cuts which began last March, and are responsible for the elimination of more than 1.3 million state and local government jobs – which Bloomberg notes is “nearly twice as many as were lost after the last recession.”
Congress tried to hide these line-by-line appropriations, but thanks to technology and the internet, you can search it for yourself.
Here’s a summary of our oversight findings — our top-down state analysis uses figures found in the Congressional Research Service (CRS) report issued 3/3/2021.
Speaker Nancy Pelosi’s House Democrats changed the allocation formula from being based on population to the unemployment rate. This change caused 23 states to gain $31.9 billion and 27 states to lose that funding. The four biggest winners were Democratic strongholds: California—which reaped an extra $6.7 billion; New York—which added another $6 billion; Illinois — increased by $2.1 billion; and New Jersey — a $2 billion increase.
It’s 2008 all over: the bulk of bailouts go to the rich and politically influential. Nobody should be surprised. From Matt Taibbi at rollingstone.com:
While ordinary Americans face record unemployment and loss, the COVID-19 bailout has saved the very rich
In late April Marko Kolanovic, a financial analyst for JPMorgan Chase, wrote to clients with good news. Pandemic aside, investors should expect stock prices in S&P 500 companies to return to record numbers some time early next year!
“The S&P 500 should attain previous all-time highs,” Kolanovic wrote, “if the monetary measures are sustained.”
The key part of this phrase was the last bit, “if the monetary measures are sustained.” In countries that did not have a Federal Reserve Bank shooting a bazooka of cash daily at Wall Street, Kolanovic suggested the coronavirus would result in a 30 percent decline in the present value of earnings.
In other words, without intervention by the Federal Reserve, the United States in the coronavirus era would be looking at a Depression-level contraction.
Assuming the Fed bazooka keeps firing, however, a large portion of the investor class is already on a road leading back to champagne and confetti. And that, as Robert Frost would say, has made all the difference.
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