Chapter 1: Understanding Government Financial Assistance

A household of four can expect to receive upwards of $10,000, regardless of whether they've experienced a decrease in income.

If you and your partner earned $150,000 or less last year, you’re set to receive an additional $5,600 from the Federal government. This sum includes funds allocated for your two children, your spouse, and yourself. Notably, this financial support is available to you regardless of any income loss over the past year, allowing you the freedom to utilize the funds as you see fit.

This latest disbursement adds to the $3,400 you received in May and the $2,400 from January. It appears that the Federal government has been quite generous during these times.

The rationale behind this assistance stems from the belief that the economy experienced a significant, albeit short-lived, recession last spring, affecting nearly every American. As a result, the government deemed it necessary to provide compensation to almost all income-earning citizens.

For those who faced layoffs, the Federal government supplemented unemployment benefits with an extra $600 weekly on top of state assistance last May. This led to many unemployed individuals earning more while not working than they would have while employed. Due to concerns about this disparity, the government has now reduced the additional payment to $300 per week in the current stimulus plan.

You might wonder where this funding originates.

The government sources its funds primarily through two avenues: borrowing from the public with no plans for repayment, or printing more money. Although it seems logical that there should be a limit to deficit spending, proponents of Modern Monetary Theory (MMT) argue that it’s acceptable to spend beyond one's means without concern for potential repercussions.

According to MMT, it’s permissible to print money to purchase bonds, especially if selling bonds directly to the public could disrupt capital markets. This newly printed currency can also be utilized to buy back previously issued bonds. Advocates of this theory assert that a rapid increase in the money supply will not necessarily trigger long-term issues like inflation.

However, many rational citizens feel uneasy about this approach.

Supporters of MMT often reference the Federal Reserve's monetary policies following the 2008-2009 recession, pointing out that significant increases in the money supply and substantial federal deficits did not result in inflation. Nonetheless, there is little discussion about the negative impact these policies had on economic growth, which averaged below 2% from 2009 to 2016. Additionally, the historical precedent of rapid money supply increases leading to inflation is often overlooked.

Critics argue that the high public debt is a looming issue for the economy. With the recent stimulus package, national debt is nearing $30 trillion, which exceeds 50% of the annual GDP. Economists express concern regarding the growing interest payments on this debt, which are approaching $400 billion each year, and the potential for a capital shortage, as the government continues to draw heavily from capital markets.

Mainstream media coverage appears to downplay the severity of this debt situation. Currently, public debt stands around $27 trillion, with approximately $3 trillion from stimulus packages yet to be allocated. Given that GDP is projected to be about $21 trillion this year, this results in a debt-to-GDP ratio of 128%. However, media reports often cite a figure closer to 107%, a misleading statistic that only accounts for the debt owed directly to the public, omitting nearly $5 trillion created by the Federal Reserve through money printing.

Although it may seem as if the government is distributing free money, this could ultimately represent one of the most costly forms of assistance ever provided.

Chapter 2: The Implications of Government Spending

In the video "Free money? Is the government really giving it away? | VERIFY," the complexities surrounding government financial assistance are explored, shedding light on the implications for citizens and the economy.

The video "6 Grants For $7,500 Free Money You Never Pay Back!" discusses various financial grants available to the public, emphasizing the opportunities for individuals to benefit from government programs without repayment obligations.