No Scott, they will spend it. Of course they will. And it will function as a stimulus, which it will be, and that will raise inflation even more. Normally that would precipitate a rise in interest rates to tame it but that would make Trump explode. So my guess is that they will wait to do this until Powell’s term is up next year and they can replace him with a toady. Trump thinks they should lower interest rates in the case of inflation because he’s a moron so if he can somehow get a majority of the Fed governors on board with that, it’s what he’ll do. (It remains to be seen if the Supremes will allow him to fire fed governors and if they do all bets are off.)
If they lower interest rates when inflation is rising we’re going to get a real snootfull of inflation. If they do raise interest rates and the tariffs stay in place with all the associated chaos, we’ll likely be looking at stagflation.
I’m sure everyone would like to get another stimie. I would too. But we’re not going to like the consequences.
I assume Bessent knows all that. But he seems to think that Trump is a genius who “knows things” that others don’t see we need to trust him.
In case you’re wondering why anyone with any sense of dignity would say such a thing, I think this explains it:
I’m not sure what he thinks Bessent is supposed to do about the Fed, but I’m sure Bessent obediently bent over and said “thank you sire, may I have another.”