The federal government recently tried borrowing and spending $3 trillion to "stimulate demand" while state governments were simultaneously shutting-down supply (by banning nonessential production, sales and work). Federal checks of $2400 per couple, and an extra $600 of weekly unemployment benefits, for example, were supposed to boost consumer spending by "putting money into peoples' pockets." Whose money? Whose pockets? Don't ask.
It didn't work, of course, because (1) lockdowns made it illegal to buy most desirable services in this service-dominated economy, and because (2) people never make big purchases on, say, a house or car on the basis of one-time windfalls.
The graph shows that real disposable income per capita rose sharply rather than fell during the 9.5% second-quarter contraction in the supply-side of the economy. Yet real consumption per capita fell substantially.
Once again, the whole Keynesian notion of "fiscal stimulus" was a total failure based entirely on fanciful "free lunch" economic reasoning and no facts. Yet Congress is once again busily at work trying to try it again. House Democrats think another $3 trillion sounds like a politically correct number - for them. If that happens it will prove as useless as the first $3 trillion. But taxpayers will then be left having to pay interest forever on an extra $6 trillion of debt.