- >With More Stimulus on the Way is it Time to Buy Bitcoin?
With More Stimulus on the Way is it Time to Buy Bitcoin?
With another stimulus deal on the way for Americans, this time under the Biden administration, speculation about economic effects is sprouting up again. How did this go last year? Have the Democrats changed anything? How many bills will be printed to meet this demand? The social welfare around the world is keeping everyone afloat, but we have yet to examine the potential fallout of this. Let’s take a look.
Michael Brown | Mar 23, 2021
The Stimulus from 2020
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. Americans received payments of up to $1,200 USD per adult making under $99,000 USD per year. This payment was valued at $267 billion USD, making it quite the expense. While this no doubt helped many Americans, it is shocking that 22% of all US dollars in circulating supply were printed in 2020 alone. The Federal Reserve printed more money in a single month than they printed in 200 years. Another round of stimulus payments, even of equal or lesser size stands to exacerbate this problem.
Public welfare decisions are rarely easily made in politics. Even less so in times of crisis. It is undeniable that welfare is needed to brace against the impact of the COVID-19 pandemic. However it is important to note that these checks were sent to Americans for purposes of stimulus, not to make ends meet. So what did Americans spend their stimulus cash on? New cars? Appliances? That 3D printer they wanted? Consumption is what they did the first time right?
Wrong. According to the chart above, the majority of Americans planned to spend it on expenses. So where is the lion’s share of this 267 billion dollars going? Right back into the hands of the wealthy landlords, creditors, and debt collectors. Then finally the banker’s cut is whatever savings are left. Even the highest earners were paying for their expenses with the stimulus. So the stimulus isn’t a stimulus at all, it’s a brand label for welfare checks.
Socialists and capitalists can both rejoice as they’ve now got a policy they can both hate. Trickle-up socialism. So not only did this 267 billion dollars de-value the American dollar significantly, the money ended up right back in the hands of the wealthy anyways. However, even with higher taxes for the wealthy, that money will not be worth the same amount it was worth in 2020. The US government will, once again, not have enough taxpayer money to send a new stimulus out, and they will print even more. Further devaluing the currency, and further lining the pockets of the wealthy, even if the stimulus is sent directly to low income households. Low income households are just the middle men in this exchange. The poor work as money laundering nodes for the wealthy in trickle-up socialism.
Under the Biden administration, Americans earning $75,000 ($150,000 for families) will be eligible to receive a $1,400 cheque in the month of March. This is $200 more than the previous year. However, if the trend follows from the previous stimulus in America, then this $1.9 trillion dollar deal will be mostly trickling up into the hands of the wealthy, just like it did last time.
Oddly enough, the left of center democrats are sending the stimulus to 12 million fewer Americans because the income brackets are more narrow than the stimulus under the Trump administration. An interesting anecdote for what is considered to be a more progressive party.
A Rock and a Hard Place
So what’s to be done then? Line the pockets of the wealthy while devaluing the currency, or let Americans starve and go homeless? Well it’s undeniable that it’s better to devalue the currency.
You’d have a civil war on your hands if you just let the people starve and go without a roof. While inflation in America may never approach Weimar-level inflation, it is certainly something to be worried about. In 2019, the US dollar had already lost over 95% of it’s purchasing power since 1913. That is only going down as the federal reserve prints more money to circulate into the hands of the wealthy.
Rebuilding the Economy with Bitcoin
Just like the Six Million Dollar Man, we can rebuild the economy, we have the technology. We have better money than ever before. That technology is of course, Bitcoin. If long-term inflation is the devil we know, we would do well to choose that path over short-term poverty and civil war. We choose this, over the outcome of refusing to feed and house people at the expense of the dollar. Where we’re going, we don’t need dollars anyways.
Stimulus checks are coming out this month, and if you aren’t spending it all on just staying alive, it might be a good time to buy Bitcoin to retain some amount of buying power, after Bitcoin has appreciated in value. Leave the proverbial sand in the oyster and come back to a pearl.
You may still be taxed on it, however you may come out of it with more money than the government gave you in the first place. In the case of the 2020 stimulus cheques, if you had bought Bitcoin with it, you would have more than $10,000 now. Who knows how much the new $1400 check will be worth 12, 24, or 36 months from now.