Evans also says More Fiscal Support ‘Incredibly Important’
It’s “incredibly important” the U.S. deliver another round of fiscal policy measures to aid the economy as it weathers the coronavirus pandemic, said Federal Reserve Bank of Chicago President Charles Evans.
“Fiscal policy has been unbelievably important in supporting the economy during the downturn that we’ve been experiencing,” Evans said in an interview Sunday on CBS’s “Face the Nation.”
“That continues to be important because we’ve not got control over the virus spread. I think that public confidence is really important, and another support package is really incredibly important,” he said.
“As you look at the economic outlook there are some negative scenarios and the ones that are most pessimistic involve not supporting state and local governments,” he said. “States have to balance their budgets. They are experiencing reduced tax revenues and so there will be employment reductions.”
Balanced Budgets
States don’t have to balance budgets and Illinois is proof.
Rules allow long-term borrowing to be part of “balancing” the budget.
That aside, the point is taken.
Hard Lockdown
Evans repeated that point on Sunday and said that a hard lockdown of four to six weeks suggested by his Minneapolis Fed colleague Neel Kashkari might help get the pandemic under control. But he doubted the U.S. government would do it.
“It would come at quite a lot of hardship for small businesses. It would require tremendous fiscal support. If the national U.S. government were willing to do that I think we could knock down the virus spread,” Evans said. “While that could work, I’m not optimistic that that would actually be adopted.”
Third Call For More Free Money
On August 3 I noted Second Fed President Calls For More Free Money.
Richmond Fed President Thomas Barkin issued a video call today for more free money.
Thomas Barkin joins Minneapolis Fed President Neel Kashkari in the free money call.
Kashkari on a Lockdown
“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it,” Kashkari said.
Running Score
- Hard Lockdowns: Two Fed Presidents, Neel Kashkari (Minneapolis) and Charles Evans (Chicago) support hard lockdowns.
- More Free Money: Three Fed Presidents, Neel Kashkari (Minneapolis), Charles Evans (Chicago), and Thomas Barkin (Richmond) support more free money.
It is a certainly that all or nearly all the Fed presidents are in the Free Money group.
Kashkari, Evans, and Barkin have made it official.
Gold’s Response to Free Money
Gold has responded to these views, and rightfully so.
For discussion, please consider Gold Soars to New High Above $2000 While Managed Money Sat it Out
What about the US Dollar? I am, glad you asked.
For discussion, please see Are the Commercial Dollar Traders Early, Wrong, or Neither?
Mish
Jeez I wish they would hurry up and get inflation to 2% because I needed paper towls today. The last lot I bought was at the Safeway in Medford Oregon, I almost did not buy them because a dollar a roll was just too high no matter the marketing on the outside of the package that said NEW IMPROVED 8 rolls = 18 rolls. They only put that sort of fraudulent slop on packaging so the BLS will use it as an excuse to hedonically reduce the paid price of the goods. Well I now need paper towels again and they are $15.59 for a 6 roll package (their largest now) and that is $2.60 per roll. Meaning from late winter last year till today – about 9 months – the price has risen 160% and it is typical of MANY items in the stores today. It is flat out gouging.
Sorry guys, but from where I sit I still can’t see the mortality situation being anywhere near bad enough that it would justify another shutdown. However, that would certainly help to expand the Fed balance sheet and establish it in the Savior capacity even further.
Lockdown during harvest season. What a good idea, NOT. If you intend to exempt agriculture and all of its support activity, then all you have done is close what few restaurants that are left.
Here’s an interesting lockdown related chart:
COVID-19: Government Response Stringency Index
The Government Response Stringency Index is a composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest response).
“Chicago Fed president Charles Evans says a 4-week lockdown could help.”
The lockdowns failed. They suppressed attainment of herd immunity and thus the number cases rose dramatically, as the states reopened their economies.
This is not free money… The Federal Debt has to be serviced, and the more the debt is run up, the more interest has to be paid. At some point in the future, the government is going to raise taxes to pay for all of this. Socialism has a price, and that price is very, very expensive when the bill comes due.
We were all wondering what the inevitable “terminal phase” of our unbacked, debt-based fiat monetary system would look like.
Now we know.
This is all criminal insanity in my opinion. There are possible treatments for this virus that when used early (within 1 to 5 days of symptoms or infection) can eradicate this virus from a persons body. At worst they do nothing to the person. We need to end this immediately.
Hydroxychloroquine.
The American Association of Physicians and Surgeons is suing the FDA, to stop them from obstructing dopctors from prescribing it to patients.
The US needs a lock-OUT for several years once a lock-DOWN has brought COVID19 under control. Globalism certainly has made COVID19 worse than it could have been.
It would help for a little while but as soon as the lockdown ends the virus will be back. New Zealand just reported one month without a single domestic case of Covid, but the PM still warns people not to let their guard down. So what good does it do to beat it if you can’t let your guard down once it is over? Because all it will take is one infected person to start the whole thing over again.
How many of you mask wearing fools use the scarf or gaiter around you neck that you pull up as you walk by someone? Guess what? They don’t work!
Researchers created a test to determine which masks are the least effective
By Alaa Elassar, CNN
Updated 9:06 PM ET, Sat August 8, 2020
Good information in that mask test story …
“We want to emphasize that we really encourage people to wear masks, but we want them to wear masks that actually work.”
The most effective mask was the fitted N95. Three-layer surgical masks and cotton masks, which many people have been making at home, also performed well.
Neck fleeces, also called gaiter masks and often used by runners, were the least effective. In fact, wearing a fleece mask resulted in a higher number of respiratory droplets because the material seemed to break down larger droplets into smaller particles that are more easily carried away with air. Folded bandanas and knitted masks also performed poorly and did not offer much protection.
“We were extremely surprised to find that the number of particles measured with the fleece actually exceeded the number of particles measured without wearing any mask,” Fischer said.
Here comes a dose of reality for all you clowns that think another lockdown can actually work. Sheese.
“Make Decisions Based in Evidence
The idea of closing down society with draconian lockdown policies is an experimental concept that is not based in reality. They are tools to be considered to slow the spread of cases so that hospitals can prepare and should not be viewed as a way to eliminate the virus. Never before has any pandemic been countered by shutting down all of society. The problems associated with such a policy quickly outweigh any of the marginal benefits. Furthermore, preventing cases is far more difficult than preventing deaths. In fact, it may be near impossible given how contagious the virus is and how lockdowns have had little effect while decimating society. A better response would be mitigating deaths and severe cases by focusing on increasing hospital capacity. That is something that we can actually control. Attempting to control a force of nature is not something that can be done easily, if at all. Support a proper response by empowering the healthcare sector, not politicians and bureaucrats. It is foolish to attempt to solve a medical problem with politics.”
Jojo, a REAL true lockdown should work, but that is the problem, you still have to go out even in a lockdown, you can’t stay locked in your house without access to fresh food for a month, or more.
The US and many other countries did not have a true lockdown.
Exactly. So why keep calling for new lockdowns, when it is impossible to have a true lockdown? Humans aren’t ant farms.
The Fed has to cover up this administration’s poor management of nearly everything. The 5th Risk by Michael Lewis really hits home. We wont get out of this mess until Trump is gone. Biden is right about this being the most critical election ever.
Einstein: “Insanity is doing the same thing over and over and expecting a different result.”
We already did the US version of a lockdown, remember? It did not work. What are these Fed presidents advocating that will give a different result this time? Throw people in jail? Hand out big fines for noncompliance? Ignore fire code and weld apartment building doors shut except for one or two that will be monitored by military personnel? People on this thread who think another US lockdown is the answer are not thinking clearly. Also, deaths from COVID-19 in the US are most recently trending down. We should see if that continues before making any more huge changes to the way the system is working.
This is the other shoe dropping at the Fed. Apparently, the stupendously excessive debt in the system is still at risk of imploding and they want political cover to debase the currency even faster than they already are doing. The founding fathers would not approve. I know the Fed works for the big banks, but how about exercising enough caution to make sure you guys do not totally destroy what is left of the US economy and the dollar, okay?
You live in an alternate universe. The death rate per capita crossed 500 today in the US. It has been going up since mid June. The Fed has to cover up for poor management of the pandemic by the federal government. There is no other reason.
I am looking at COVID-19 deaths posted on Worldometers when I state COVID deaths in the US are most recently starting to trend down. That has nothing to do with any alternate universe.
The number of deaths per capita is going up not down. I have no idea what number you are looking at and calling it a trend. The number never plateaued or went down. It was in the 400s the last month or so. It is over 500 now. Back in March-April it was 300s. Until that number starts going down consistently, this will not end.
“I have no idea what number you are looking at”
I gave you my source. Worldometers 7 day moving average of deaths for the US has started to fall again over the last week.
What is your source? You have yet to mention it.
Where do you see the deaths per 1M going ? You could argue the number was going down but not anymore.
“Where do you see the deaths per 1M going ?”
The difference in the two resources you and I are using is interesting.
The one I am looking at most recently is trending down slightly and the one you are looking at is recently quite flat. The one you are using has June 26/July 1 “probable/earlier deaths added.”
In my view it it not clear where the death rate is going. It is not going up at an exponential rate; I can tell you that for certain. It looks to me like it is pretty darn flat at worst, so one can reasonably expect healthcare capacity will be able to keep up. That might change when we get to flu season, but for now it looks pretty stable.
If masks and social distancing work as they purportedly do and people comply with that, then the trend in deaths should be heading down before flu season.
Capacity is not keeping up in some places. They are back to having big rig freezers for dead bodies in south Texas. A lot of people are also dying in retirement and care facilities. The deaths due to covid is still under reported. Some states refuse to classify deaths as being from covid if it unknown how they died. There is no down trend in deaths per capita since reopening.
The US veRsion of lockdown worked pretty well in NY.
It is difficult to measure the effectiveness of NY State lock down because of the poor reliability of many of the antibody tests, especially the finger prick tests. In any case, you are citing an instance where one governor out of 50 elected to do that and NY was the first major outbreak during a time when doctors still thought that ventilators were the best option for a severe case. Much of our understanding of COVID-19 has changed since then, and we should not ignore that when making decisions about what is best. Also, if we could measure the T-cell immune responses as well as the antibody responses accurately, then we might get a surprise that the NY state lock down was not all that effective.
You are in denial. Lockdowns work albeit with a significant economic impact. Now whether some of our Southern states will ever buy into that fact is another story.
“You are in denial.”
You are the one leveling personal attacks instead of providing useful information and resources.
In the case of COVID-19, knowing what we know today, in my opinion, there are much better options than lock downs. The cost of lock downs is known to be extremely high and causes permanent damage to the careers and livelihoods of families. At best lock downs delay, but do not stop, the progression of COVID-19. A notable issue with those advocating lock downs is their purpose was initially to flatten the curve to prevent the healthcare system from being overwhelmed in hot spots and the goal posts have moved now that treatment for the disease has improved. Recent press cites longer term illnesses caused by COVID-19 and lock downs are now to stop the spread anywhere there is a major outbreak, regardless of whether or not capacity of the healthcare system can cope.
In a country such as the US where it would take Marshal Law to contain everyone in their homes for 2 months, there is zero chance of stamping out every infection everywhere using lock downs. As evidence of this, please refer to the recent outbreaks in China in other areas where they did there best to stamp out infection and hot spots have reappeared.
Please be practical and understand all the consequences of what you are recommending.
This guy Kashkari just looks certifiably nuts! Would you trust this guy?
I trust him more than the current administration.
I trust neither. Fed officials should just shut up on the issue of lockdowns. They are not doctors. Such recommendations should come from doctors, not bankers. Where did he pull the six weeks number from? his ass?
FED is out of control, pretty soon, Fed will want to intervene into which education our children should get… Hey, it falls under their “low unemployment” mandate!!!
FED is out of control and it is time to END IT
Here you have a dead rotting corpse of an economy,hundreds of trillions spent (on Wall Street)since 2008,yet the economy has been in virtual collapse mode for 12 years! US is now El Salvador x50,sad!
If the United States had done a 100% lock down , followed the CDC guidelines for re-opening and had a national testing and tracing strategy we wouldn’t be here now. Just look at Germany and France.
Not sure if you’re being sarcastic, but France is a total shit show. Wife has relatives in Paris. A few months back, Covid was everywhere.
infections have gone up in france, paris in particular. 2200 a day but u.s. has 54,000 a day. our population is just over 5 times the size. I’d say the U.S. is not handling it well
For once I agree with his proposal. We must first have the virus under control before the economy can come back to normal. To have the virus under control we must have a real lockdown, do a good test and trace for a few weeks.
or, you know, you could wear a mask.
Well I sort of agree. Virus is out of control. Hard lockdown would work. Can’t expect people to stay home if they can’t pay bills. Fed is correct to say it’s the role of the executive and legislative branches. Economy won’t restart while virus rages on.
“Can’t expect people to stay home if they can’t pay bills.”
They can stay at home indefinitely, as long as they pay “running” bills. Which, with a bit of conservation, aren’t all that for most.
Continuing to pay on sunk costs, is pure idiocy. The only thing more idiotic than that, is to force third parties to pay for it, via debasing them to hand you money to pay already sunk costs.
Just stay at home, while paying as little for water, power, trash collection and maintenance as you can get away with. Safe in the knowledge that the cops who could otherwise evict you; and who could evict your landlord from his house for not being able to pay some mortgage as a result of you not paying rent; are busy staying at home as well.
The Fed wants to own it all and they will. They are the cause of everything people. Kennedy asassination, 911, and fake pandemic.
These guys are looking out for their friends..the 1%. That’s all.
Yep, every day, their minds are pretty preoccupied with one and only one thought : “how do we make the 0.1% even richer?”
There won’t be a revolution in America, because everyone’s clamoring to join the club and not fight for social justice.
Brazil with nuclear weapons. That’s what America is.
that .1% owns pretty much everything except what’s left of the value of the dollar and with this non stop printing they’re plundering whats left of that. It’s hard to see how this doesn’t take the US down a few notches. things will be very different in 5 years. theres no way things are going to stabilize. everything is is suspension right now but they will start falling-moving fast at some point.
YEP !,…it’s really that simple. That is all that is going on. Everything else is a smoke screen.
These guys are looking out for their friends..the 1%. That’s all.