The cornerstone of President Donald Trump’s plan to defeat the
Chinese coronavirus and save potentially millions of lives, and to
salvage what can be of the U.S. economy, is a massive expansion of the
Treasury’s Exchange Rate Stabilization Fund from about $93 billion to $500 billion.
These funds will be used to underwrite the economic relief plan, which includes $300 billion for covering payroll for small businesses, $200 billion for critical industries and a gigantic expansion of unemployment benefits that amount to paid sick leave for every American who had a job when the virus struck.
These lending and grant programs are essential to incentivize millions of Americans to stay home to combat the virus, and to help the U.S. economy to survive the effects of being shut down during the outbreak response effort. If done correctly, tens of millions of businesses and hundreds of millions of jobs can be saved.
But the Exchange Stabilization Fund has other important, economy-sustaining uses.
Normally, the U.S. Treasury operates the Exchange Stabilization Fund to “purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury (‘the Secretary’),” according to Treasury’s website.
Read more at: The dollar is too strong for the recession that just began, Mr. President
These funds will be used to underwrite the economic relief plan, which includes $300 billion for covering payroll for small businesses, $200 billion for critical industries and a gigantic expansion of unemployment benefits that amount to paid sick leave for every American who had a job when the virus struck.
These lending and grant programs are essential to incentivize millions of Americans to stay home to combat the virus, and to help the U.S. economy to survive the effects of being shut down during the outbreak response effort. If done correctly, tens of millions of businesses and hundreds of millions of jobs can be saved.
But the Exchange Stabilization Fund has other important, economy-sustaining uses.
Normally, the U.S. Treasury operates the Exchange Stabilization Fund to “purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury (‘the Secretary’),” according to Treasury’s website.
Read more at: The dollar is too strong for the recession that just began, Mr. President
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