Democrat congresswoman Maxine Waters has proposed giving $2000 a month to every adult, and $1000 a month to every child in America, to help see them through the COVID-19 financial crisis.
Waters — the Chair of the U.S. House Financial Services Committee — made a series of other extraordinary legislative proposals to help the economy in a memorandum dated March 18.
The proposals also include a suspension of all consumer and small business credit payments, including mortgages, car payments, student loans, small business loans and personal loans.
It's a sign of just how desperate the financial situation is, that economic proposals that are more far reaching than anything since the Great Depression are even on the table. They go much further than presidential-hopeful Bernie Sanders’ recent call for a one-off $2000 emergency payment.
Announcing the proposed measures, Waters said that media reports indicated the Trump Administration would give $850 billion in aid to impacted industries:
“If true, it is apparent that this Administration is missing the point – families must come first. That is why I am proposing a bold fiscal stimulus package and public policy response that will benefit hardworking and vulnerable Americans who may face financial hardship or even eviction or foreclosure as a result of the coronavirus crisis.”
Proposal would cause massive inflation
Founder of Quantum Economics Mati Greenspan said he was taken aback by the $2000 a month proposal.
"Basically it would cause massive inflation because you get more money competing for the same amount of goods," he told Cointelegraph.
Greenspan said it appeared to be a Universal Basic Income in disguise and that he didn't believe President Donald Trump would ever sign it into law. However that could change if the Democrats win the November election. If so:
"In the long term Bitcoin could certainly benefit, I don't know about the rest of the crypto market. Basically anything that would hold its value in the face of a depreciating currency — especially if the reason is poor judgement by the government and banks — that certainly strengthens the case for Bitcoin."
The free money proposal appears to have doubled since yesterday, when Waters told SiriusXM's The Joe Madison Show that every adult should be given $1000 a month.
Consumer and small business debt holiday
Waters is also proposing that negative consumer credit reporting, debt collection and repossessions should be suspended for the duration, and that after the crisis has passed, borrowers would be provided with "affordable opportunities to repay arrears over time without late fees or back interest".
Evictions and foreclosures would be banned and rental and utility payments suspended for assisted renters. Non assisted renters would be given payment assistance.
Greenspan said some of the measures could be appropriate if they were temporary and strictly time limited, but the danger is that “once those tools are used for the first time they're very difficult not to use again”.
“We saw that with quantitative easing,” he said. “It's Pandora's Box, and you can put Pandora back into the box.”
Other legislative proposals
The suspension of commercial rental payments for businesses and non-profits
$50 billion in grants to small businesses
100% payroll tax rebate, and a 200% rebate in 'hot spots'
New rules to require public companies to disclose supply chain risks and ramifications
A ban on the creation of new financial rules not directly related to the crisis
Bans on stock buybacks and dividends
Doubling the US commitment to the International Monetary Fund's emergency backstop facility
$5 billion to help the homeless — ho are at greater risk of catching the disease
Forgiving $10,000 of student loan debt after the crisis has passed