The most important priority of the United States government, bar none, is to maintain the US dollar as the reserve currency in a global economic system. Unemployment income support is a much much lower priority. Baked into our monetary system is the side effect that excess currency created by the Fed invariably acerbates the wealth inequality in society. The reason we have such a huge gap in wealth in our society is directly related to the Fed’s response to each stock market declined since 1987.
Therefore any deficit spending, such as for comprehensive unemployment, while it provides short-term relief for workers, does increase inequity. We are trapped by our money creation system in this vicious cycle. The deeper reason for this is the end of cheap oil which has underpinned the continuous growth needed to fund debt-based money. Peak cheap oil now also means peak debt and peak debt-based monetary system. (Oil over $70/barrel crashes the economy and under $40/barrel bankrupts new oil production. The current low oil prices are due to demand destruction from Covid-19.)
The Federal Reserve will create as much currency as necessary to inflate dollar-based asset values in order to maintain a wealth effect for middle and high earners which is necessary to maintain their faith in the status quo. The Federal Reserve will allow only as much direct money transfers to low-income citizens as is necessary to preclude open revolt.
Since World War II all the countries of the world have had to use dollars to conduct trade and to borrow money for development (good try euro, but no cigar). They are in the same position as someone who just bought an expensive house and then got a pay cut of 60%. They are desperate for dollars to pay their loan obligations at the same time that commodity prices are dropping due to the economic contraction. This means that demand for dollars will rise and the value of foreign currencies as compared to the dollar will continue to fall.
As mentioned above, the very highest percentage of currency created by the Federal Reserve will go to our economic/political elites. The fact that this also makes US dollar-based assets more and more attractive to foreign investors helps fuel this wealth effect as well.
In the short-term deflation will rule, but eventually inflation will kick in as all this excess money printing achieves some velocity, and people lose faith in the dollar’s ability to be a store of value. As a thought experiment to understand this better ask yourself, “Why doesn’t the Fed just print enough money to pay everyone their 2018 income in order to get through this crisis? And while they do that why not also just also print enough currency to buy all the gold in the world so that if inflation kicks in and the value of gold skyrockets the US will still be OK?” The answer is that they might get away with buying a few tons of gold but only until the dollar price of gold rose to infinity (or inversely, the value of the dollar dropped to zero compared to gold).
In the long term all currencies will lose value compared to gold and silver, but in the short term the dollar will very likely appreciate more against foreign currencies than gold and silver.
Therefore, the best the working class in the United States can hope for are bigger crumbs from the Democratic party as compared to the Republican party and continued low prices for imports. Fortunately, the US economy is also more self-sufficient than most of the world.
Eventually, maybe within as few as 5 years, things will become so chaotic and desperate that the world should be able to agree on some type of reset such a debt jubilee and a new reserve currency system based on gold or maybe gold plus a basket of commodities.
In the meanwhile, I recommend to my friends and family to have a good part of their savings in gold (up to 35%) and just be thankful that they have a currency that is holding its value better against gold than other currencies in the world.