I don’t think it would be wise policy to cut Medicare and Social Security or make taxpayers pay back the debt in the foreseeable future.

The Fed should keep expanding the money supply and the treasury should enable massive domestic spending programs to take advantage of the global asymmetry produced by dollar demand.

Dollar (USD) demand is high because it is the world reserve currency and much foreign debt is denominated in it. Its debt holders need to cover their debts in dollars and governments and corporations flee to it as a safe haven in times of distress. The United States needs to meet this demand.

COVID-19 is a world crisis and most governments are attempting to lessen the economic blow by expanding their local currencies. This expansion will most likely produce inflation for everyone except the United States as dollar demand remains high.

The US has unprecedented dollar debt, but it (or more accurately the Fed) can “print” as much as it needs. Other countries can’t.

The United States needs to get dollars to its citizens more than it needs to take dollars from them in the form of spending cuts or taxes. Deflation needs to be fought like the plague or the domestic economy could enter a deflationary depression like the ’30s.

It’s fiscally responsible—dare I say “conservative”—to expand Medicare and Social Security now and in the future. Better yet, have the treasury continue to send money to its citizens until the Feds 2% inflation target is overshot and the US is back to full employment.

It’s not fair for the rest of the world but if this isn’t done, demand for foreign goods will continue to decline and everyone will be worse off.

Eventually, this global monetary dynamic will probably unravel, but in the long run, we are all… well, you know.