The country of victorious corruption: $100 billion was stolen in the US to help victims

MOSCOW, 05 Jan 2022, RUSSTRAT Institute.

 

The US Secret Service reported on the “theft of the century” — the embezzlement of $100 billion from the federal program to help Americans affected by the coronavirus pandemic.

The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed by Donald Trump on March 27, 2020, provided for an “attraction of unprecedented generosity” — the distribution of first 2.6 trillion, and then another 900 billion dollars in direct payments to citizens, as well as various loans for small businesses and NGOs, including bad loans. They were “pulled apart” by thieves.

The crime was the illegal distribution of funds and benefits to those who did not deserve them, through a variety of fraudulent schemes – up to fake vacancies, marriage scams and dead souls. The case mainly concerns two areas within the CARES Act — the 953-billion-dollar Paycheck Protection Program (PPP) and the 896-billion-dollar Pandemic Unemployment Assistance.

To return at least part of the stolen money, the Secret Service has opened more than 900 criminal cases, but so far it has managed to find only a measly 3.5 billion. However, even this looks like an achievement against the background of the 75 million that the Department of Justice heroically confiscated from the PPP scammers.

“Can we stop fraud? Will we? No, but I think we can definitely prosecute those that need to be prosecuted and we can do our best to recover as much fraudulent pandemic funds that we can,” was the discouraging comment of the assistant special agent of the Secret Service Roy Dotson, appointed to coordinate the investigation.

And while some Americans are figuring out in their minds how it was possible to steal the national budget of the Czech Republic (comparable amounts), others remind that a huge part of the “COVID” aid was snatched by business sharks who did not need it at all, which, in essence, is outright fraud. There is, however, no less a fundamental question and it worries more and more: how much did the printing of the Fed’s “COVID” trillions cost the current and future generations of Americans?

“Accounting and control” American-style

Perhaps the only thing that went like clockwork in the American program of assistance to victims of COVID-19 was the vote for it in the Senate and the House of Representatives of the United States. The decision was made very quickly and almost unanimously under the general rhetoric of “There is no time to delay!”. Such touching unanimity of Republicans and Democrats, conservatives and liberals has not been observed since 9/11. It is not surprising that many details of the program turned out to be raw, or even just not working.

The first report of the US Accounting Chamber on the results of three months of the Paycheck Protection Program revealed that all this time there was terrible confusion in the Small Business Administration (SBA), which oversaw it. No one really knew who exactly to give money to, how to separate the lucky ones from those who are not entitled to payments, and what kind of reporting to demand from them.

It turned out, for example, that in April-May 2020, the US Tax Administration and the Treasury allocated more than a million payments… to deceased persons, and a hundred loans were issued to firms that did not even specify their own name. During the same time, more than 170,000 loans worth $38.5 billion were canceled – just because the SBA could not provide companies with clear instructions on how to use this money.

“We found that the Small Business Administration processed over $512 billion in guaranteed small business loans, but isn’t ready to address fraud risks and hasn’t said how it plans to oversee the loans,” the Accounting Chamber said in its report.

How are you going to track 30,000 loans of $2 million each and another 4 million loans for smaller amounts, the chamber asked officials? Not at all, they answered, after a little thought. Let someone identify the fraud first — then we will take away the loan.

Of course, everyone began to use this inimitable lack of “accounting and control”. In order to get government money, American firms illegally overstated their salary costs, lied about the number of employees and swore that they would certainly spend a loan to cover allowable expenses. In reality, the borrowed money most often went to the personal goals of the owners of the companies.

Looking at this madness, the Accounting Chamber threw up its hands, scribbled letters to Congress, demanded measures and corrective laws, but all in vain.

Meanwhile, not only private businesses managed to catch fish in muddy water, but also their FinTech creditors, who served as “gateways” on the way of public money. There are no tricks that they did not use! There were unregistered enterprises, and the placement of companies at the addresses of citizens, and rounded loan amounts. Surprisingly, in June 2021, in the last month of PPP’s work, when the inspection authorities signalled signs of fraud with might and main, there were even more violations.

“Our evidence provides growing evidence that the PPP may not have been an efficient source of capital allocation,” concluded three professors at the University of Texas at Austin, who discovered the above-described tricks of “fintech”.

Ineffective? It depends for whom. It is impossible to believe that companies could “chop up” money givers without the knowledge of the latter. It is obvious that a number of schemes were created and carried out jointly by both, that is, we have before us the classic embezzlement and kickbacks.

Who needed all this?

To the question of who needed all this (not counting, of course, thieves and corrupt officials), the Americans themselves answer in different ways. Many Democrats are inclined to the idea that ex-US President Donald Trump and his son-in-law Jared Kushner were personally behind the scam, whose shell companies allegedly picked up a lot of “COVID” loans. However, several million of public money, which the former owner of the White House allegedly snatched from the 3.5 trillion aid, is clearly not a game that was worth playing.

There is much more reason to claim that Trump tried to take full advantage of the distribution of “helicopter” trillions to win the presidential election in November 2020. But this was also only part of the idea: in fact, the giant issue pursued not only a narrow political goal in the form of a second presidential term of “Big Donald”.

Recall that March 2020 was marked not only by the explosive growth of the coronavirus pandemic in the United States (from its only victim at the beginning of the month to 5,359 deaths at the end), but also by record collapses of American stock indices. As well as the extraordinary measures of the Federal Reserve, which announced unlimited “quantitative easing” on March 15 and lowered the rate to 0.00-0.25%, where it remains to this day. At the same time, the Fed secured support for its actions from “friendly” central banks: the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.

Thus, just seven months before the election, against the background of the economic crisis and the growing pandemic, a printing press with almost unlimited possibilities for issuing dollars was prepared for uninterrupted operation, which began to be thrown into the market almost a trillion a month. Moreover, according to one theory, it was not even the Fed itself that was behind this, but Trump, who in March 2020 established informal control over it through his two “special representatives”, Judy Shelton and Christopher Waller.

It wasn’t just about bribing a voter. And not even about the fact that Washington preferred to cope with the uncontrolled growth of the federal budget deficit before the election at the cost of hyperinflation, which allows for some time to finance anything at all: from new jobs to a new super-weapon. Perhaps the main reason for the “COVID” tranches was a desperate attempt to save the global currency itself — the US dollar, the basis of Wall Street’s well-being – in conditions when for some time the global market simply disappeared in the coronavirus fog.

The issue of a colossal amount of “extra” and “free” (at a zero Fed rate) paper with images of American presidents on always leads to the same thing — to the most active buying of real assets around the world for them and to pumping up the maximum possible number of countries with “cheap” loans in exchange for political and economic preferences. The planetary rise in the price of life due to the export of inflation from the United States and the poorly concealed robbery of resources in exchange for “candy wrappers – this is the real price of the grandiose American fraud with the distribution of unsecured products of the Fed printing press.

However, America itself also fell victim to it. Hyperinflation has already led to the fact that used cars were named the most liquid commodity there — their prices are rising faster than Bitcoin. Secondary housing, the cost of which has also soared in recent months, is quite a bit inferior to them. Cars, houses and many other goods in the US have risen in price by an average of 20% over the year – this means that every American who has not received the same salary increase has become poorer.

Even the index of personal consumer spending, which most underestimates inflation to the delight of central banks around the world, broke the American anti-record of 1982. Despite the fact that 40 years ago, the financial system of the US was much healthier than it is today: with an “expensive” dollar and a positive real interest rate.

As for the forecasts for 2022, they are very sad. The US is waiting for either a further round of inflation due to all new tranches, or a fully-fledged recession, confirm economists. The Americans have already spent the money distributed to them, mainly on paying off loans. Simply put, America’s financial speculators dropped money “from helicopters” to themselves.

Institute for International Political and Economic Strategies – RUSSTRAT

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