Michael Hudson on How US Stimulus is Primarily for Elite Interests

Executive Summary

• The stimulus is primarily for the elites and banking interests, not to stimulate the overall economy.

Introduction

The elite nature of US stimulus is explained in the following quotation.

“The government money helicopter only flies over Wall Street. It creates money for the banks. And the banks basically provide money to real estate and to the financial sector, not to the economy at large. So, you can say that the government runs a deficit by putting money into the economy. But there are two ways of doing this. One is to put money into the banking sector, in which case you use quantitative easing, you inflate asset prices, you raise the price of real estate or at least loans for real estate, you raise stock and bond prices. Or the government can run a deficit by actually doing real physical spending into the economy, by building infrastructure, by doing social spending. And there’s all the difference in the world between whether the government spends the deficit on the FIRE sector (finance, insurance and real estate), or whether it does it on the real economy. And for the last quote 12 years, since 2008, the government’s been spending money on the financial sector, not into the real economy.” – Michael Hudson

Source: Michael Hudson

https://michael-hudson.com/2020/12/jubillee-perspectives-with-steve-keen/