‘Give me a lever long enough, and a fulcrum on which to place it, and I shall move the Earth.’
Ancient Greek mathematician Archimedes
The new administration is setting an ambitious goal for itself.
Archimedes expressed what at least was a ‘theoretical’ possibility. Joe Biden went off the deep end, saying his administration would move ‘heaven and Earth’ to give people a shot in the arm.
From USA Today:
‘President-elect Joe Biden wants Americans to get 100 million COVID-19 vaccine shots during the first 100 days of his administration, a lofty goal to reverse a slow start to the nation’s vaccine rollout.’
Our guess: Heaven will stay put.
It’s the Biden Team that will crawl out of its hole…and venture where no man has gone before…and where none ought to go.
Which is why 2021 is shaping up to be one of the most entertaining years ever.
Yes, dear reader, moving heaven and Earth was just part of a larger program…a $1.9 trillion grab bag of boondoggles and absurdities…including $2,000 ‘stimmy’ cheques…pretending to be ‘relief’. Here’s The Washington Post:
‘The Biden plan directs roughly $400 billion to fighting the public health crisis, including through a national vaccination program, scaling up testing and contact tracing and providing paid sick leave to contain the virus’s spread, senior Biden administration officials told reporters ahead of the speech.
‘To fill the lingering holes in the economic recovery, the plan also includes more than $1 trillion in direct aid to struggling families by increasing stimulus checks to $2,000, extended unemployment insurance, rental protections and nutrition assistance. The Biden proposal also allocates $440 billion to small-businesses, local communities and transit systems on the brink.’
As foretold, more stimulus is on the way. Biden says the feds have a ‘moral obligation’ to provide money they don’t have to people who don’t need it.
We have already seen that ‘stimulus’ can raise prices (especially asset prices). But it can’t magically turn printing press money into the goods and services a real economy requires.
Last year, the feds unleashed as much as $6 trillion in new stimulus, the most ever in one year. Federal debt jumped nearly $4 trillion in the last 12 months.
According to the theory, stimulus is like a lever…you can use it to pry into the economy and lift up growth.
But where’s the growth?
Later in the same article quoted above, the Post tells us that…
‘Fears that the economic recovery is losing ground are mounting as nearly a million people filed for unemployment last week and the country lost jobs in December, marking the first decline since the recovery began in May.’
Yes, the stimmy delivered in 2020 failed to do the trick. The stock market took off. But the real economy still sags.
Just the beginning
So what’s next? Moving heaven?
Nah…just more stimulus, of course.
Even CNN sees which way the wind is blowing:
‘US debt surged by $7 trillion under Trump. It will go much higher under Biden
‘President Donald Trump certainly lived up to his self-proclaimed status as the King of Debt during his term in office. The national debt spiked by $7 trillion during Trump’s tenure — and it’s about to soar much higher under his successor.’
Biden says this is just the beginning. There’ll be more coming…as necessary. He’s already on the case…with a proposal to double the minimum wage.
‘Incoming President Joe Biden will seek to increase the federal minimum wage to $15 an hour as part of his $1.9 trillion pandemic relief bill, a move that could complicate its passage through the closely divided U.S. Senate.
‘Biden had previously said he would make increasing the minimum wage — currently $7.25 an hour — an early priority.’
Nothing is impossible now. Apple is now said to be worth $2.2 trillion…or 40 times its net income. A price-to-earnings (P/E) ratio of 40 is usually reserved for new companies whose earnings are rocketing upwards.
But Apple is now 44 years old…and its sales over the last five years are almost flat.
So what gives?
Tesla stock is at maniac levels, too; the company is now supposedly worth $800 billion. There is almost no chance that Tesla will ever earn enough to justify that valuation.
And don’t forget Bitcoin [BTC]. It’s a whole ‘nuther thing, of course. Is it good money? Bad money?
We don’t know…but big money is going into BTC.
Where does all this money come from? Surely it, too, must be a feature of the feds’ ‘stimmy’ programs.
When money is so easy to come by, everything becomes a little lighter…easier to pry loose and levitate.
That is, when you can replace years of hard work, saving, self-discipline, innovation, resources, and time itself…with fake money…
…the SKY’S the LIMIT!
So heaven will have to get out of the way.
For The Rum Rebellion