Coronavirus War Bonds: A $1 Trillion Goose Egg from the Economy’s Keystone Cops

Posted in: Market NewsOp-ed
April 12, 2020 10:00 PM UTC

Jim Cramer and Larry Kudlow are known for hair-brained economic schemes. Their latest goose egg? A $1 trillion coronavirus war bond.

  • Jim Cramer recently proposed a $1 trillion coronavirus war bond to help the government finance its crisis response.
  • Larry Kudlow promises to take this “great idea” to the president.
  • But who’s buying it besides Larry?

Ron Insana, whom I’ve always thought was well-named due to the peculiar way his brain works, recently melded minds with Larry Kudlow and Jim Cramer to hatch the goose egg of an idea that the government should issue a coronavirus war bond:

My colleague, Jim Cramer, made a very interesting recommendation Monday morning, calling on the U.S. Treasury to issue a $1 trillion, 30-year “war bond” to finance our battle against the coronavirus. He pitched the idea on CNBC to Larry Kudlow, who chairs the White House National Economic Council

These three make quite the triumvirate of talent because I’ve always thought of Cramer and Kudlow as the Keystone Cops of Commerce.

The triumvirate of capital talent

Larry Kudlow’s economic forecasts have been a solid predictor of where the economy isn’t going. | Source: NICHOLAS KAMM / AFP (i), Matt Trommer/Shutterstock.com (ii). Image Edited by CCN.

Lunatic Larry, of course, was a co-creator of all three trickle-down tax plans (Reagan, Bush, and Trump) that didn’t trickle and that never quite paid for themselves as he promised they would.

(Corporate taxes under Trickle Down Trump have brought in about half as much corporate tax revenue as they were bringing just before the cuts became law.)

Krafty Kudlow is also the shimmering seer of dim glances into the future who stated during each of the last two major recessions – and just before the present one – that he saw no recession anywhere on the horizon and that stocks and the economy had nowhere to go but up!

Shortly thereafter, recessions were officially declared to have begun before Larry gave his foundering forecasts, and stock markets crashed all over the world.

Larry’s greatness at predicting showed again when he claimed the U.S. had “contained” the coronavirus when it first entered America and then later justified his error by saying no one could have foreseen the dramatic surge of coronavirus the U.S. has experienced.

Never mind that the whole world had just witnessed the monumental efforts necessary to contain the virus in China. Expecting a great prophet to foresee from China’s economic catastrophe what would happen in the U.S. is clearly demanding a lot.

Larry Kudlow and Jim Cramer (pictured) are the Keystone Cops of Commerce. | Source: AP Photo/The Columbus Dispatch, Courtney Hergesheimer

Last week, Larry was on the TV with his old co-host Jim Cramer when Jimbo popped him a big idea of the U.S. issuing $1 trillion worth of coronavirus war bonds at 1.5% interest with a 30-year maturity date.

Larry thought this was swell and promised to share the concept with President Trump as soon as he got back to the White House.

I am all for it. This would be a longterm investment into the future of American health, safety and the economy…. I think the concept is exactly right. I think it’s exactly right!

Who’s buying a coronavirus war bond?

During The War to End All Wars (and the one that followed), war bonds were a scheme to exploit American patriotism to fund the government’s essential war debt.

(This was before the government had the Federal Reserve as its Financier of First Choice.)

Today, with Americans themselves being the ones who need the money the “coronavirus war bonds” will raise, who exactly is going to buy these bonds? Are U.S. corporations and small businesses going to buy the bonds in order to provide money for the government to bail them out?

Are Americans without paychecks going to run out and buy coronavirus war bonds so the government can send them stimulus checks? Are other nations facing their own coronavirus debt going to run out and buy them just to help us out, instead of tending to their own crisis moments?

Color me skeptical.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

This article was edited by Josiah Wilmoth.

Last modified: April 13, 2020 8:56 AM UTC

David Haggith @EconomicRecess

David Haggith lives in the Pacific Northwest and is the author of DOWNTIME: Why We Fail to Recover from Rinse and Repeat Recession Cycles and publisher of The Great Recession Blog for eight years, from which his articles about the economy are carried on over fifty economic news websites. He writes exclusives for CCN and is a regular contributor at Seeking Alpha , TalkMarkets, and Zero Hedge. His Twitter page of occasional economic humor is @EconomicRecess. WritelyYours (@) gmail.com

Show comments