In August 1929, the Federal Reserve of New York, at that time the most вЂњhawkishвЂќ among all, was the first to rush to raise rates from 3% to 6%. This tightening of the nuts eventually led to the famous вЂњBlack MondayвЂќ of October 28th and the subsequent outbreak of the Great Depression.
Now the New York Fed is far from being so hawkish. In practice, today, for the first time since 2013, it officially launched a quantitative easing program. The Federal Reserve announced the purchase of government bonds worth $40 billion. However, stock indices almost did not notice.
Donald Trump is trying to revive financial markets with promises to cancel (or greatly reduce) social payments from American salaries. They must pay 14.4% of their income, this money goes to finance the Social Security system. Trump hopes to refuse social benefits for the period until the end of 2020 вЂ” unless, of course, Congress approves him of this.
Democrats in the House of Representatives are very cool on Trump's plan. They still see their own priority as creating the conditions for providing paid coronavirus Americans with sick leave.
At the same time, presidential candidates from the Democratic Party offer their own, no less radical ideas. Bernie Sanders said that the coronavirus epidemic only proves it is right вЂ” it is necessary to nationalize medicine in the United States as soon as possible. Like, with private medicine, hundreds of thousands of poor Americans without insurance will die without proper support.
His opponent, Tulsi Gabbard, who is still participating in the primaries for some reason, said that now is the best time to introduce universal base income in the United States. She is sure: in the period of 2020, every American can be paid $1,000 per month, this eliminates his spending on force majeure due to the virus.
By the way, the Hong Kong authorities have already taken this path: they gave out 10,000 Hong Kong dollars to their citizens at a time (this is 1,200 in the US). In a similar way, they did in Italy, where mortgage payments were temporarily frozen.