Where Will the Stimulus/Relief Package Take Us?

As Connecticut senator Chris Murphy points out here, there is a moral issue at stake here.

But, if nothing else, this will be a very interesting experiment in macroeconomics.  The neoliberalism that has defined the United States for the last 40 years has resulted in an obscene increase of wealth for the top 1%, even more so for the top 0.1%. What happens to all this money?  Well, some of it buys yachts, but most of it goes into stock and bond portfolios, many of them offshore, where it stays, generation after generation.

OK, so what happens when $1.9 trillion goes into the hands of people whose net worth is less than, say, $250K?  It’s spent, more or less immediately, into groceries, clothing, rent, car payments, and restaurants.  Now it’s in the hands of grocery store owners, restaurateurs, etc., soon to be spent somewhere else.

We’ll soon see what a high velocity of money does to an economy that has been stagnant for the common American for the last four decades.