As Congress debated a coronavirus relief package to attempt to inject tax money into the U.S. economy, far-left Democratic Rep. Rashida Tlaib (Mich.) was touting her own plan to give thousands of dollars to everyone in America — yep, even illegal aliens.
Her plan, like the bipartisan bill making its way through the U.S. Senate Wednesday, would cost about $2 trillion. And she proposed paying for it by ordering the U.S. Mint to issue two $1 trillion platinum coins.
Say what now?
Over the weekend, Tlaib tweeted that while she fully backed House Democrats' relief package, she hoped the leadership would also consider her "truly universal relief proposal," the Automatic BOOST to Communities Act, that would send thousands of dollars to everyone in the U.S.
The plan includes sending debit cards pre-loaded with $2,000 for everyone in the country — kids and adults alike — and then recharging every card with $1,000 per month until a year after the end of the coronavirus crisis and the economy recovers.
And the liberal progressive lawmaker made it clear in the proposal language for her legislation that when she said "every person in America" she meant every person — including illegal aliens and visitors who are here more than three months.
Section II of the proposal, titled "guaranteeing universality," states:
“Every person" includes:
a. Dependents, so a couple with two children would receive 4 x $2000 = $8000 in total.
b. Non-citizens, including undocumented people, permanent residents, and temporary visitors whose stay exceeds three months.
c. Individuals who do not have a bank account, social security number, or permanent address.
d. People living in unincorporated territories or protectorates and Americans living abroad.
e. To ensure that this program is as universal and comprehensive as possible, the U.S. Treasury will develop its list of eligible individuals in coordination with the Internal Revenue Service, the Social Security Administration, the Federal Election Commission, and every other relevant federal, state, and local government agency, including state-level Departments of Motor Vehicles (DMVs).
The debit cards could be used online, in stores, or to pull out cash at ATMs. Oh, and don't worry, the government would require that all fees connected to the cards be waived, so your "free" money would be even more free.
Seems expensive. How would she pay for it?
Good news! Tlaib promised that her plan would add nothing to the U.S. debt.
Sound too good to be true? Just wait.
Instead of issuing debt, Tlaib's proposal said, the program "would be funded directly from the Treasury, using its legal authority to create money via coin seigniorage, which is a statutory delegation of Congress's constitutional power of the purse."
What does that mean? Well, her bill will have the Treasury order the U.S. Mint to issue two $1 trillion platinum coins, which Congress would tell the Federal Reserve to purchase at face value.
The Fed would then credit the U.S. Mint $2 trillion and retain ownership of the two new coins forever. Then the "Treasury Secretary would 'sweep' the newly created reserve funds from the Mint's account into the regular Treasury General Account."
And — Voila! — money for everybody.
Won't this create inflation?
Funny you should ask.
Economist Bruce Fenton criticized Tlaib's scheme on Twitter after she started talking about it.
"Rep Tlaib is proposing to make two coins worth $50 each & say they are worth $1 trillion each," Fenton wrote. "Then for our government to have the mint create artificial money on a computer and use that to buy the coins from ourselves."
"Seriously. That's the actual plan," he concluded.
If Tlaib's coins were made from a fair-value amount of platinum, how much would they weigh? Fenton calculated that, too: 50,566 tons each.
"There is obviously not enough platinum to [do] this," he noted.
MMT holds that any government that mints its own money can always fund itself with that money, the Mercatus Center explains. Supporters of MMT believe that governments don't need to worry about large debts or really need to think about inflation, which is how they justify massive federal programs such as Medicare for All and the Green New Deal, the center adds.
The Boost Act is only two pages long, but attempts to explain how it will get away with creating money from thin air by leveraging MMT. Long ago, U.S. dollars stemmed from the backing of a commodity (gold) and the government standardized a system of bills. Since the greenback has been off the gold standard, most of society's money isn't tangible anymore and the Fed can create as many dollars as they want behind closed curtains. The Fed has already been doing this for years but with MMT, the plan claims to remove inflation. MMT is popular these days among politicians like Bernie Sanders and Alexandria Ocasio-Cortez. The reason for this is because MMT aims to increase taxes considerably and take most of it from the private sector. Congress, the Fed, and the Treasury will allow massive amounts of stimulus and inflation will be balanced by stifling the private sector's ability to purchase resources.
Proving Redman's point, Tlaib's proposal concludes:
In the long term, the card infrastructure should be converted into a permanent, Treasury administered digital public currency wallet system, to serve as a privacy-respecting “eCash" complement to universal Fed Accounts and/or Postal Bank Accounts for All. This proposal should be accompanied by progressive tax reform to ensure that emergency relief provisioning does not exacerbate income or wealth inequality in the long-term.
Naturally, the folks at People for Bernie loved it: