How Mass Unemployment Will Lead to Cash Grabs, Wealth Taxes, and More

The bloated budget of the U.S. is only going to be getting larger. And that means the Powers That Be will be seeking out new sources of capital.

Those sources?  ANYONE who has money lying around.

Let me explain…

The U.S. was already deep in debt before the economic shutdown triggered a depression. Government Debt to GDP was 106%, while total debt securities in the financial system relative to GDP was well over 400% of GDP.

Then the COVID-19 panic hit, and the U.S. economy was put on lockdown. Regardless of whether or not this move was justified, the end result from an economic and fiscal perspective is:

1)    Over 36 million Americans are now unemployed and receiving unemployment benefits.

2)    Tax revenues have collapsed bringing near-insolvent states (CA, NY, IL) to the brink of disaster.

The U.S. is dealing with this situation by throwing trillions of dollars at these issues.

From a monetary standpoint, the Federal Reserve has printed over $2.7 trillion since the end of February. Over the same time period, the federal government has performed a $2 trillion stimulus program. It is now voting on whether to implement another $3 trillion stimulus program.

Will this be enough?

Not likely.

A study from the University of Chicago has revealed that 68% of unemployed Americans are receiving MORE money from unemployment than they were receiving from their former jobs. In fact, the median replacement rate is 134%, meaning they are making 34% MORE money from being unemployed than they were from working.

What incentive, if any, will there be for these people to return to work when the economy reopens? If you can make more money from NOT working… why would you want to start working again?

My point with all of the above is that the U.S. is now facing the very real possibility that it will need to continue to finance trillions in unemployment benefits for much longer than was previously believed.

The debt markets will pick up much of the slack here, but at some point the political class will start looking for new sources of capital.

That source will be you, me and everyone else.

The plan behind this has been in place since 2011. Elites knew well in advance that another crisis was coming, and they put in place legislation that would allow them to:

1)    Freeze bank accounts and use them to “bail-in” financial institutions/ banks.

2)    Close the “gates” on investment funds/ money market funds to stop you from getting your money out.

3)    Impose wealth taxes and seize unused assets.

Did you know the IMF has already called for nations around the world to introduce a wealth tax of 10% on NET WEALTH as soon as possible?

If you think that’s bad, consider that the Fed plans to both seize and STEAL savings during the next crisis/ recession.