(Bloomberg) — Treasury Secretary Steven Mnuchin said that lawmakers should redirect unspent stimulus funding, including money he’s pulling back from the Federal Reserve, to buoy the economy as the U.S. waits for a coronavirus vaccine.
“I hope that Congress will seriously consider reallocating $580 billion of funds that have already been appropriated that wouldn’t cost taxpayers an additional penny,” he said in a phone interview on Thursday.
Earlier in the day, Mnuchin requested the return of unused funds from the Fed’s emergency pandemic lending program, triggering pushback from the central bank, which said the programs served a vital role.
The U.S. economy had a “strong” recovery after a partial shut down this spring due to the pandemic, Mnuchin said in the interview. Companies with healthy balance sheets can access money through private markets, he noted.
But “for companies that are impacted by Covid — such as travel, entertainment and restaurants — they don’t need more debt, they need more PPP money, they need more grants,” he added, referring to the small-business lending program known as the Paycheck Protection Program. He also suggested the funding could be used to extend unemployment insurance.
The White House has largely abandoned earlier efforts to encourage lawmakers to strike a fresh stimulus deal, following months of stalled negotiations with House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell.
Redirecting the unused Fed money would allow officials to target parts of the economy that are still suffering, Mnuchin said. But the move would require congressional action.
“I believe it will have a significant impact for people whose businesses have been impacted by Covid — they can then get through to the beginning of next year when we will have vaccines broadly distributed and fully reopen the economy,” Mnuchin said.
Treasury Seeks Unused Funds From Fed in Clash With Central Bank
Mnuchin, in a letter to Fed Chairman Jerome Powell released Thursday, sought a 90-day extension for four of the central bank’s emergency lending programs, but requested other programs expire on schedule on Dec. 31.
The funds that Mnuchin is planning to ask Congress to redirect include unused money authorized by the Cares Act for the Treasury Department to make direct loans to companies deemed critical to national security and to airlines.
The Fed said in a statement that it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
©2020 Bloomberg L.P.
Citizens don't expect national economies to recover anytime soon – Ipsos Research
Dan Davies- Weekly Column – Horgan lacks plan to rebuild B.C. economy – Energeticcity.ca
The good news is we now see a light at the end of the tunnel. We’re able to start planning and thinking about rebuilding —about heading out to local businesses, about being able to start saving again for the future and plotting a path to personal economic recovery.
The bad news is John Horgan, and the NDP don’t seem to have a plan in place for rebuilding British Columbia — and the latest proof is in the Public Accounts for 2020/21.
Normally, these are just dry numbers, and they pass without much notice. This time is different. The numbers don’t lie, and they show where B.C. is at and, more importantly, where the province must go in the coming days.
The provincial deficit sits at $5.5 billion — which is a lot of money. Taxpayer-supported provincial debt has increased by $13.5 billion in 2020/21, with total provincial debt now at $87 billion. This works out to $16,919 in debt for every British Columbian.
Now, the Official Opposition backed the government in providing support, even when John Horgan was bungling the rollout of things like support for small businesses.
But we’ve also been clear that we need a plan to rebuild the economy. It’s not just enough to hope; we need a roadmap that clearly lays out how we ensure there are jobs in every corner of the province. The NDP hasn’t done that, except to spend $500,000 on a consultant from England.
We’re all doing the hard work of figuring out how to get ahead in our personal lives. It’s not too much to expect Premier Horgan to do the same for British Columbia. It’s time for him to do his job and create a B.C. jobs plan.
What freight rail tells us about the economy – Marketplace
Warren Buffett was once asked which economic indicator he would choose if he were stranded on a desert island with access to only one set of economic statistics. There are lots of indicators out there — consumer confidence, inflation and unemployment.
But Buffett picked freight rail traffic. And for good reason.
“What we move is the economy. It’s the tangible economy,” said Ian Jefferies, CEO of the Association of American Railroads. “And so as the economy goes, rail goes. So when rail is doing well, it usually means the economy is running pretty strong.”
Right now rail is doing well, especially when it comes to intermodal train traffic, Jeffries said. That’s when products travel in containers from ship to truck or train.
“The highest volumes we’ve ever seen”
“For the first half of 2021 … intermodal traffic was the highest volumes we’ve ever seen,” he said.
Intermodal train traffic was up more than 17% from the first half of last year, Jeffries said. No surprise there, because train shipments fell off when the pandemic started, like the rest of the economy. But intermodal traffic was also more than 5% higher than in 2019, which was a good year. These intermodal trains are brimming with the imported products consumers are demanding.
“This is a good sign,” said Diana Furchtgott-Roth, a former deputy at the Transportation Department now teaching at George Washington University. “It’s a good sign first of all that people have money to spend. And second, it’s good that they have confidence to spend.”
So, the freight rail tea leaves are pointing squarely toward more economic growth, right? Actually, Furchtgott-Roth said that this year, it’s complicated.
Jammed ports can cause problems on the rails
U.S. ports are backed up with a traffic jam of ships full of imports. Because of that whole intermodal thing, problems at the ports can cause problems on the rails. Plus, shipments for the holidays are starting now.
It could take longer for imported products to reach store shelves, Furchtgott-Roth said.
“If we don’t have enough goods shipped by rail, if the congestion continues, the prices will be higher,” she said.
Freight rail also tells us about U.S. exports. Right now, rail shipments of grain are down. That’s kind of weird, since farmers are producing plenty, said Joseph Schofer, who teaches civil and environmental engineering at Northwestern University. Grain might also be caught up in the international shipping snag, he said, or maybe it’s a storage issue.
“If you don’t have enough storage, you can’t move product and the system slows down or freezes up,” he said.
Ore, metal and chemical shipments are up
Rail shipments of other raw materials like ores, metals and chemicals are up, Schofer said; they’re going to U.S. factories, which are ordering a lot of supplies right now.
“Because they have either expectations that they can sell more products, or they have firm orders for more products,” he said.
Either way, Schofer said, it’s a vote of confidence in the economy, pointing the way to more economic growth this fall. How much growth depends on COVID-19, of course, but also how long it takes to unclog the ports and sort out storage issues and other bottlenecks that could cut into the rail shipments the economy needs to keep humming.
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