Yep, too big to read.  Why do I say that?   Well, did you know the bill is the longest bill ever passed by Congress — 5,593 pages?   That’s right … over 5,500 pages in total.  And while we believed the “relief” bill focused on purely financial matters, it turns out Congress offered a few other forms of relief in the bill.   You may be surprised by some of them.  I certainly was. 

Welcome to this week’s Steak House Index update.

If you are new to my blog, or you need a refresher on the SHI10, or its objective and methodology, I suggest you open and read the original BLOG: https://www.steakhouseindex.com/move-over-big-mac-index-here-comes-the-steak-house-index/

Why You Should Care:   The US economy and US dollar are the bedrock of the world’s economy.  

But is the US economy expanding or contracting?

Before COVID-19, the world’s annual GDP was collectively about $85 trillion.  Then it shrank … then bounced back!   We can thank global fiscal and monetary policy for the bounce.   According the the Q3, 2020 ‘preliminary’ numbers, annual US GDP is back UP to about $21.1 trillion.   And still, together, the U.S., the EU and China continue to generate about 70% of the global economic output.  

The objective of this blog is singular.

It attempts to predict the direction of our GDP ahead of official economic releases. Historically, ‘personal consumption expenditures,’ or PCE, has been the largest component of US GDP growth — typically about 2/3 of all GDP growth.  In fact, the majority of all GDP increases (or declines) usually results from (increases or decreases in) consumer spending.  Consumer spending is clearly a critical financial metric.  In all likelihood, the most important financial metric. The Steak House Index focuses right here … on the “consumer spending” metric.  I intend the SHI10 is to be predictive, anticipating where the economy is going – not where it’s been.

Taking action:  Keep up with this weekly BLOG update.  Not only will we cover the SHI and SHI10, but we’ll explore related items of economic importance.

If the SHI10 index moves appreciably -– either showing massive improvement or significant declines –- indicating growing economic strength or a potential recession, we’ll discuss possible actions at that time.

The Blog:

As the Biden administration starts its first day in office, I thought I’d take a brief tangent to an entertaining, and decidedly non-economic, non-financial, topic.   The $900 billion relief bill (amendment) has passed … and implementation of its many provisions has already begun.   We’ve all seen it:   $600 checks, additional unemployment benefits, the PPP2, etc. 

But hidden away amid the thousands of pages, far from the lime light, are a few, quite odd, additions that have me a baffled.   Did no one actually read this thing? 

Dalai Lama:   On page 2,635, in Section 343, you will find “Policy Regarding the Environment and Water Resources on the Tibetan Plateau.”   I’m not kidding.   The bill goes on to say, “It is the sense of Congress that — the Dalai Lama should be commended for his decision to devote political authority to elected leaders in accordance with democratic principles.”   Fabulous.  I’m sure you join me, like all Americans, celebrating this ground-breaking conclusion by Congress!   And if you do, you’ll be pleased to hear that on page 2,640 of the bill, the United States has been authorized to appropriate $1 million per year, for years 2021 to 2025, to fund the office of the “United States Special Coordinator for Tibetan Issues.”  Here here!   Makes me proud to be an American.

Smokey the Bear:   According to Section 711 of the US Code, anyone who uses Smokey’s image “for profit” potentially faces a 6-month prison sentence.   Good news:  The bill makes it OK for you and I to use an image of Smokey — even for profit — without any criminal penalty.  Phew.      

Israel:   On Page 341 we see an allocation of $500 million to support our ally, Israel.  The funds “shall be for the Israeli Cooperative Programs” and includes $73 million to support the Government of Israel’s “Iron Dome” defense system — this is a defense against short-range rockets.  OK.  Got it. 

Water Hyacinths:   I’ll be frank:   I haven’t found this in the bill.  But a number of on-line sources make a comment like:

“One section repealed a variety of little-known criminal penalties for minor violations, including the transportation of the water hyacinths and the use of the Swiss coat of arms.”

That’s good.  I’m sure you’ll join me in a sigh of relief.   I don’t know if I’ve ever accidentally transported water hyacinths, but it’s good to know that this is one less thing I have to worry about in the future, should I happen to find myself in the company of water hyacinths.    And you can now use this at your discretion, without fear of prosecution:

Yes, that’s the Swiss coat of arms.   Knock yourself out.  

Finally, in the final pages of the Bill you’ll find the “Regulatory Relief and Work Home Safety Act.”  In this section, things like “flammability standards” are adopted … and “mattress” is defined.   I kid you not.  It’s there. 

All humor aside, this bill was clearly too big to read.   I can’t imagine our legislators, or their assistants, read the whole thing, cover to cover before they voted for it.  I don’t know about you, but I find that idea mildly concerning. 

“Here are the 5,593 pages of language which I’m now perusing and on which we’ll be voting in about six hours,” tweeted Minnesota Rep. Dean Phillips, a Democrat who worked on the virus relief compromise.  Phillips asked where he could find Evelyn Wood.

What else might be tucked away in this bill?  I’m sure we’ll hear more over time … but it definitely brings to light an issue we should all be concerned about.   If a congressional bill is simply too long to read and understand, within the time constraints offered, is this effective government?   I wonder.  Perhaps the first congressional bill proposed by the Biden administration should be very short bill that requires future bills are much, much shorter in length.

Just a thought.

OK, next week, we’ll wade back into meaty, chewy economic issues.  After all, this is the Steak House Index.  🙂

• Terry Liebman