What the states and local governments are missing is not labor or materials, but currency. Currency is a utility. Depriving states of a necessary supply by rationing the distribution and rewarding hoarders is like expecting people to work in the dark.
The recent distribution of three trillion is clear evidence of Congressional authority and ability to give currency to households directly, instead of making them qualify for loans from banks. So, what is the point of giving banks first dibs in “normal” times? The banks can be relied on to ensure the reelection of the critters by managing the distribution of currency on the local level.
Banksters are the guard dogs at the gates of Congress. But, fact is that banks have not recovered from the debacle of 2008. The only financial institutions whose assets have increased on a regular basis are credit unions. Which is why banks are now seeking permission to buy credit unions.
People are not borrowing from banks regardless of how low the interest rate is set. Why is the Treasury distributing debit cards? To give money to banks. Our household, for example, has not deposited our $2400 check. Which means our bank cannot lend out those dollars even short term.
Fact is that currency is worthless unless it moves. The rate at which currency moves through the economy has been decreasing since the first bailout in Obama’s first months. It registered a slight uptick when the big spender got elected but has been falling steadily since. Giving money to people who will spend it quickly is the only remaining option even though it is an admission that Congress has been to blame for the deprivation all along.