Sunday, December 13, 2020

Revenue sharing make a comeback

Bipartisan group splitting $908 billion coronavirus proposal into two bills
The plan, confirmed by a source familiar with the talks, will include a $160 billion proposal that ties together the two most controversial elements: more money for state and local governments and protections against coronavirus-related lawsuits.

The second proposal will total $748 billion and include ideas that garner broader support including another round of Paycheck Protection Program (PPP) funding for small businesses, unemployment benefits, and more money for vaccine distribution, testing and schools.

I see 160 billion in revenue sharing between House and Senate, and 748 B in spending.  I will think it balanced if Vermont gets 3/4 billion  in cash, sort of my tail boundary. That means about a third billion per districts. The numbers seem low, increase the sharing and decrease the other.

We have changed the order. Last time it was devalue then revenue sharing. This time it is revenue sharing in anticipation of a milder monetary shock. The parties get the concept, the ghost of Nixon is returning, but they are a bit less hysterical.  

We do learn. Exchanging order, commutative property, optimal congestion. In this case we have leaned that we can hedge the pace of devaluation and avoid the overnight shock.

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