The Stimulus Package Won’t Cut Poverty, It Will Accelerate It
Authored by Anthony Pompliano,
ZeroHedge, March 20, 2021 – Excerpts:
….What people forget is how bad the wealth inequality gap in America is. According to the St. Louis Fed, the bottom 50% of Americans own only 1% of the wealth, including 13.4 million families that have a negative net worth. It doesn’t matter how many stimulus checks you send to those 13 million families, it won’t pull them out of the dire situation that they currently are in. The checks help, but let’s not kid ourselves — they do not cut poverty.
So why exactly do I believe this stimulus package is a net negative for the bottom 50% of Americans?
Simply, the benefit of a stimulus check and unemployment insurance is drastically outweighed by the negative impact of inflation, both in consumer goods and asset prices.
All the academics, millionaire bloggers, and wealthy hedge fund managers get real mad when you start to disprove their narrative that the government is cutting poverty and showering money on people. Here is a generalized view of the problem:
- Each socioeconomic class experiences different levels of inflation. The richest hold investable assets and are less likely to purchase consumer goods most affected by inflation. The lowest socioeconomic classes hold no investable assets and are more likely to purchase inflationary goods.
- The official inflation numbers are widely inaccurate. The official data says less than 1.5% inflation, but the Chapwood Index claims 7-12% depending on the city and Shadow Stats claims over 6% inflation as well.
- These large stimulus packages flood the system with liquidity, which drives asset prices much, much higher. (Zero interest rates help significantly here too).
- Those holding investable assets get wealthier and those not holding investable assets become poorer.
It is that simple. The purchasing power of the U.S. dollar is being eroded away based on historical trends, but these massive stimulus bills (which now total almost $6 trillion in a year) accelerate the problem. As I said, the second the Senate voted positively for this bill, the government is further enriching the wealthiest people in America, while simultaneously pushing the bottom 40% of Americans into a worse financial situation.
I don’t want to present problems without solutions. That feels unfair and intellectually dishonest. So how do we solve the problem?
First, we have to help small businesses, the unemployed, and those who are struggling financially due to the economic crisis. We don’t do that by creating new money to inject into the system, but rather by reallocating the government budget from bad investments to good investments……
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Some of the prime examples of “bad investments” involve the government allocation of resources to fund the massive social welfare state.
It disincentivizes work, invites fraud and corruption on a scale which is beyond containment, keeps people dependent on government, promotes vagrancy, crime, and societal decay.
Massive social welfare programs accomplish almost nothing in the way of lifting people up out of poverty, and do nothing to help restore financial health and long term security for American families.
They require enormous funding outlays and are a primary driver of America’s deficit spending time-bomb – all with an inevitable ‘feeding-effect’ for future run-away inflation and economic instability..
The Leviticus 25 Plan is a prime example of a “good investment” by government – targeting massive debt elimination at ‘ground level’ and restoring a citizen-driven economy and citizen-centered health care system.
It will reduce dependence on government on a broad scale and provides a powerful ‘helping hand’ to lift millions of people up out of poverty. It will re-incentivize work and generate incredible long-term productivity gains.
The Leviticus 25 Plan generates $383 billion budget surpluses each of its first five years of activation – and pays for itself entirely over a 10-15 year period. It will provide long-term strength and stability for the U.S. Dollar and provide a clear counter-force against inflation.
The Leviticus 25 Plan – An Economic Acceleration Plan for America
$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3727 downloads)