Dr. Yongtai Hsu points out that Inflation is happening every day.
The $1 trillion stimulus bill has been passed, and most Americans will get a $1,400 check in the next few weeks. Of course the general public is happy to get the money, but what are the far-reaching effects on economic Life behind the government’s bailout?
St. Andrew’s Christian Church invited Chinese-American economist Dr. Yongtai Xu to deliver an online lecture on “Economic Outlook after the Epidemic” on the evening of the 12th, and he hit the nail on the head by pointing out that, from an economic perspective, this is tantamount to “quenching the thirst of the hemlock “It may temporarily ensure social stability, but it sets the stage for the next crisis.
“The bailout money handed out by the government is not a value produced by GDP, it is an unproductive figure. A year into the epidemic, governments around the world, including the U.S. government, are handing out all kinds of relief, and behind the massive printing of money is unavoidable inflation, which is happening every day, yesterday, today, tomorrow.”
Xu Yongtai admits that for people who are in poverty due to the epidemic, the government issuing relief can temporarily save them from the fire and can ensure their basic Food and housing. But how much help can $1,400 bring to most families?
“We’ve always said that free pie doesn’t fall from the sky, but the relief money we’re giving out now really is free pie. For most Americans, the government has never given out so much and for so long. But there is really no benefit to handing out money to everyone; human inertia will increase and people will be reluctant to work.”
Xu Yongtai cited the Port of Los Angeles as an example, many people now take government relief and unemployment benefits and are not motivated enough to participate in the workforce. The New Crown (CCP virus) epidemic has had a huge impact on global imports and exports, and the Port of Los Angeles saw almost no cargo coming in or going out in the first half of last year, with imports and exports gradually recovering from the second half of the year. Today the port is stacked with cargo, which has spawned significant demurrage and led to price increases for goods, directly impacting the general public’s spending.
“The current limited labor force is a major reason for the massive piling up of cargo at the port, with dock workers reluctant to go to work and lacking motivation and incentive to work.” Because they don’t go to work they can get unemployment and relief payments.
Meanwhile, behind the government’s massive bailout payments is a fiscal deficit that is rising straight up the line. According to statistics, the total amount of the government’s multiple rounds of stimulus bills during the epidemic has accumulated to about $6 trillion. According to a report released by the Congressional Budget Office on the 8th, the federal government’s fiscal deficit reached $1.048 trillion in the first five months of fiscal year 2021 (October 1, 2020 to September 30, 2021) so far, an increase of $423 billion over the same period of fiscal year 2020. In fiscal year 2020, which ended last Sept. 30, the federal government deficit reached $3 trillion, also more than twice the previous deficit high.
The Congressional Budget Office also predicts that the federal deficit will remain high over the next 10 years, with liabilities gradually increasing and exceeding World War II-era records. Inflation is no longer inevitable.
Dr. Hsu pointed out that government bailouts are tantamount to “quenching thirst”. (Screenshot of online lecture)
Dr. Hsu also advises young people: “Are these times lucky or unlucky for young people? Many young people face unemployment upon graduation, and their careers are cut short by the epidemic. But young people should not rush to cater to society to meet the fashion to find a career, must be based on their personal hobbies, specialties, knowledge, rational for their future to make a choice. If you want to start a business you must do it before it’s too late.”