The Problem Is Congress Does Not Know How To Count

The Senate will soon begin discussion on the $1.9 trillion COVID-19 relief package proposed by the White House. We have seen finally some of the breakdown of where the money is going but I’m convinced that the appropriations committees in the House do not know how to count. We found out on March 2, 2021, that over $1 trillion out of the $2.9 trillion approved in 2020 has not yet been spent. Even though it hasn’t been spent they want to ask for another $1.9 trillion. I want to look at one particular provision where the numbers are crazy - Congress has appropriated $412 billion for the expense of the $1,400 payment.

From a math standpoint, we have two quantities $412 billion and $1400; all we have to do is please divide one into the other and it will tell us how many people will receive potentially the $1,400 checks. One more fact - the population of the United States is approximately 327,000,000 people and out of that, approximately 75,000,000 are under the age of 17.

So, let’s see what our formula delivers if we divide $412 billion by $1,400, we find out that the number of $1,400 units is 294,285,714. If we have 327 million people and of that 75 million are under the age of 17, then we simply subtract 75 million from 327 million we arrive at a number of 252 million people who would be eligible for the $1,400 unit. I know the math is correct so that would mean there are 42 million people counted in excess.

The House Ways and Means Committee reported that 159 million stimulus checks from the CARES COVID-19 relief act had been sent out but indicated there were still 35 million checks (or $49 billion) at that time had not been paid out. It would seem based on the numbers there’s a lot of money sloshing around in Washington apparently not getting out to the people who needed it. It is too early to tell how much of the $900 billion signed into law in December 2020 has not been sent out.

I have pointed out in several commentaries that the $1,400 will do much for people who are at the poverty level. The poverty level is about $25,000 a year, or just over $2,000 a month income; the "stimulus" check would amount to around 75% of the monthly expenditures for poor people. The politicians in Washington don’t seem to understand that the $1,400 check will cover about three weeks of expenses, and then what do they do? Will there be another stimulus program, and one after that and one after that? A handful of Democrats seem to have come up with a solution to that problem.

Here is the latest path to bankruptcy for the nation. Some Democrats want to increase the payment from a one-time $1,400 to $2,000 per month per person over 16 in a household for as long as we have the Coronvirus. Rich Smith of the Motley Fool suggests that if the pandemic runs for 12 months those payments would exceed $8 Trillion. The payment would go to the 20 plus million illegals in the country and all children over the age of 16.

Do you know under this bill, if passed, a family of 4 could get $96,000 a year? This would not exclude other support payments. Here is a scary thought - a 16-year-old teenager getting $24,000 a year. One could ask why anyone in a family would work if you can get almost $100,000 for not working at all. Two other points under proposed legislation - first-year income all the income will be taxable. I think the government should charge a flat tax rate of 24% for all recipients before the checks are sent out generating almost $2 trillion in tax revenue, The second issue is what happens if the money stops because the economy starts to have positive GDP, how do you go from $100,000 a year to zero?

I’m afraid that even if the economy starts recovering it will be difficult to stop paying out the money. Don’t be surprised that if it passes the next step, it will be a guaranteed monthly income of at least $1,000 to everyone who got the $2,000 per month. If that were to happen the cost will drop to $4 trillion a year, at some point in time.

Elizabeth Warren just introduced her new asset tax. If you have a net worth of over $50 million you will pay an asset tax of 2% on everything you own. If you are fortunate enough to have over $1 billion you will pay 2% on everything over $50 million to $1 Billion and then 3% on everything above that and you pay that every year. 

There is talk in the Biden administration of moving the top estate tax rate to as high as 70%; all of this is designed to produce a massive wealth transfer from the individual to the central government.

What can you do to stop this insanity? Write to your Congressman and Senator and tell him or her you want to hear from them what is being discussed and how will they vote and why. You have to keep the pressure on the elected officials and you have to let them know that you are holding them accountable. The time has passed that the elected officials can do what they want; they need to do what we want.