- The billionaire “bond king” Jeffrey Gundlach on Wednesday slammed the proposed multi-trillion coronavirus relief bill initiated by the Democratic party, and suggested that two-thirds of US stimulus funds are “leaking out.”
- Gundlach said if the bill passed, the combined bailout towards the pandemic over three months up to May would amount to “over 150% of Federal taxes collected” in 2019.
- The House Democrats’ new $US3 trillion spending proposal puts forth a number of lifelines for workers struggling during the coronavirus pandemic, including additional stimulus checks for millions of Americans.
- The House is expected to vote on the bill Friday.
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“Bond king” Jeff Gundlach on Wednesday night poured scorn on the latest $US3 trillion coronavirus relief package proposed by House Democrats, and suggested that two-thirds of the stimulus funds provided so far are “leaking out.”
In his tweets, Gundlach said:
“Another two months, another multiple trillion $ relief package proposal. It would bring the running bailout total so far…in just three months…to over 150% of Federal taxes collected in all of the most recent reporting year. “Long Term consequences” not so “long term” anymore.
“For decades approximately 25% of submitted claims for unemployment benefits were deemed qualified. At present about 75% of these are deemed qualified. It sort of suggests that 2/3 of the stimulus funds are leaking out.”
Under the new $US3 trillion spending proposal put forward by the Democrats this week, US citizens would get another round of one-time $US1,200 cash payments to individuals and $US2,400 to married couples.
Other provisions included: expanding the eligibility for stimulus payments to cover $US500 for dependents of all ages, not just children under the age of 17, and people with taxpayer identification numbers.
The House is expected to vote on the bill Friday.
Gundlach also criticised the surging federal debt, saying that bailouts and stimulus proposed so far could be equated to “over 150% of federal taxes” collected last year. The US collected $US3.46 trillion in taxes in 2019, while the total combined amount of state aid provided, if the Democratic bill passed, would pass $US5 trillion. His sentiments echoed the views of several prominent Republicans who have criticised the massive state aid programme.
In April, Senate Majority Leader Mitch McConnell said he’d rather let states financially squeezed by the coronavirus pandemic declare bankruptcy than extend federal aid that would require further deficit spending. He later rowed back the comments after a sizeable backlash.
Gundlach has previously expressed disappointment over the purpose of taxation if “endless” borrowing is viable. In a stinging attack, Gundlach appeared to suggest that the Treasury Department’s levels of borrowing are unsustainable.
Separately, US Representative Alexandria Ocasio-Cortez took a jab at Bill Gates for pushing his fellow billionaires to pledge more donations towards fighting the coronavirus and argued that they could just pay their taxes.
“It could even be a modest % of what they earn every year. We could have an agency collect it and everything,” AOC said in her Twitter thread.