Is Everyone Getting $1,000 From The US Government? (Helicopter Cash Bailout) #Best Education Page #Online Earning

so right now the markets are down

massively overall and most people's

portfolios look something like mine now

I invest in individual stocks so as a

result I'm seeing more of a dip here but

overall I am down about ten thousand

dollars or thirty four percent on a

money weighted return now I personally

live in New York State which has become

a hotbed for this virus and there were

some very drastic actions that were

taken place yesterday which is spurring

a lot of talk about this helicopter

money so what we found out yesterday is

that restaurants bars gyms and movie

theaters would need to close their doors

by 8 p.m. on Monday bars and restaurants

were allowed to do takeout or delivery

only and as a result millions of service

workers are going to be without work and

this just so happens to be a part of the

population that is not well-off

financially to begin with as many of

these people solely rely on tips for

their living so as a result if they're

not able to work and have people coming

into restaurants what exactly are they

going to be doing to have money to pay

their bills especially at a time when

schools are closing and they have to be

watching their kids and they may not

have access to school lunch programs and

things like that

now many states including New York have

also asked non-essential businesses to

consider a voluntary closure and they

also said that this may be an

involuntary closure down the road where

essentially businesses are forced to

close their doors so the types of

businesses that are asked to remain open

are things like you know convenience

stores and pharmacies but non-essential

businesses like coffee shops for example

are being asked to consider voluntary

closures which again is going to put

more service workers out of work

giving them no real options here for

income now here's one local example of

this for me the Rivers Casino in my area

announced that they would be shutting

down as part of this plan by the New

York state government and about 900

employees are being sent home

with two weeks pay but beyond that it is

very uncertain about

what these workers will be doing for pay

and that is why we are seeing talks

about this potential helicopter money

strategy or giving everybody essentially

a cheque giving them money to go out

there and buy their groceries and

essential items for their survival

so Mitt Romney came out yesterday

proposing this idea that every American

would receive a $1,000 check to support

themselves in their families during this

crisis time and this has a lot of

parallels to an idea proposed by former

presidential candidate Andrew yang known

as the freedom dividend where every

American over 18 years of age would

receive something called a freedom

dividend in the amount of $1,000 so a

lot of people are excited about this

potentially or wondering whether or not

it will actually happen so let's get

into that right now and talk about the

likelihood of us all getting a check for

$1,000 from the US government now this

idea of helicopter money is considered

to be an alternative to something known

as quantitative easing which is what we

are seeing happen right now and if you

don't know what that is guys don't worry

we're going to break it down right now

quantitative easing happens during a

time of crisis and this is when the

federal government steps in and

purchases large amounts of Treasury

bonds and mortgage-backed securities in

order to free up liquidity for the banks

now the biggest problem here with this

quantitative easing is that the money

that is used to purchase these assets

essentially comes out of thin air

also known as the government printing

money and I'm sure we have all heard of

this before how governments can print

money since we are no longer backed on

the gold standard and of course the

problem with printing money out of thin

air is that this drastically increases

the supply devaluing each dollar that

every one of us have in our wallets and

in our bank accounts now quantitative

easing has been used successfully in the

past during times of economic crisis but

we have seen examples in history of when

it was taken too far and had

catastrophic effects for example this is

exactly what happened in World

when Germany decided to leave the gold

standard and basically print massive

amounts of money to fund the war effort

well this drastically increased the

supply of this country's money and

essentially dropped the value

substantially also known as a period of

hyperinflation so quantitative easing is

a useful tool in the tool belt of the

Federal Reserve but if it is used

irresponsibly it can have catastrophic

effects so essentially this idea of

helicopter money is an alternative to

the quantitative easing of the banks and

instead of giving money to the banks it

would be given directly to the people as

the government prints more money to free

up liquidity for business to continue

and for people to continue spending

money stimulating the overall economy

now we found out on Sunday night that

this quantitative easing was already

taking place and the Federal Reserve was

going to be printing 700 billion dollars

of money in order to free up liquidity

for the banks to allow them to make

loans to small businesses as well as

consumers and the best way to understand

this quantitative easing is to think of

it as the Federal Reserve swapping

assets with the banks they give the

bank's 700 billion dollars of cash or

liquidity and in exchange they take

those Treasury notes and mortgage-backed

securities now the overall effect this

had on the market we saw yesterday it

resulted in the worst day in the stock

market since in 1987 as this largely

panicked investors and made them think

you know why is the government pumping

money into the economy what is the

bigger picture and what is going on now

during a economic recession the

government essentially has two different

tools in their tool belt that are

largely used number one is the

quantitative easing which we've talked

about already

aka printing money and the second one is

lowering interest rates to lower the

cost of borrowing money for consumers

and businesses so the Federal Reserve

also cut interest rates to zero which

essentially means they don't really have

any tools left in their tool belts other

than just continuing to print money and

if we end up in a recession and the

government is unable to

basically get us out of that through

quantitative easing this is referred to

as a liquidity trap because there's no

real good option to stimulate the

economy other than negative interest

rates which is a totally different topic

for a different video so essentially by

cutting interest rates to zero

these Federal Reserve has used their

biggest tool and their tool belts

already and if there's more action

necessary beyond this they would have to

look beyond cutting interest rates and

additional quantitative easing which is

why this idea of helicopter money is

being tossed around so should we all

expect to get a $1,000 check from the US

government I would say it is highly

unlikely for the following reasons first

of all this is what you would consider

to be a last ditch effort after

quantitative easing and interest rates

cuts failed to do their job and we

really haven't given it enough time to

see how this will affect the overall

economy second of all there's a number

of large problems with the helicopter

money strategy and that's largely why it

has never been implemented even though

it has been talked about during times of

economic crisis during the stock market

crash of 2008 it was tossed around but

never implemented and Japan also talked

about this strategy in 2016 but again it

never actually came to fruition

because there's a number of massive

problems with just sending everyone a

check for a set amount of money and the

biggest problem here is that with

quantitative easing this action can be

reversed because essentially what is

happening here is the Federal Reserve is

swapping assets with the banks they give

them a supply of money to free up

liquidity and they take on the Treasury

notes and mortgage-backed securities

however down the road when the economy

is good they can swap back have the

money given back to the Federal Reserve

and give the bank those assets back if

the federal government simply gave

everyone a check for a set amount of

money there's no way that action could

be reversible in the future because

nobody's going to send the government

back their thousand dollars because

they're going to have spent it already

on something else

another big question surrounding

helicopter money is whether or not

people

would actually spend the money because

the idea here is to give people a

thousand dollars to buy supplies and to

spend to stimulate the overall economy

and many people would probably not spend

the money instead they would hoard it in

their savings accounts defeating the

purpose of stimulating the overall

economy so are we likely to see it the

answer is probably not what we'll

probably see instead is potential tax

breaks for businesses or individuals

which is essentially accomplishing the

same task of helicopter money freeing up

money and liquidity for the overall

economy and increasing the money supply

or we may see stimulus packages directed

to certain industries like the service

industry but the idea of everyone

getting a check for a thousand dollars

while it sounds nice on paper when you

actually dig into it there are some

massive holes with this plan so anyways

guys that is the end of this video let

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#Best Education Page #Online Earning

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