I agree to an extent. But that amounts to basically "trickle down economics" that protects the incumbents (large banks, many of which are foreign, mortgage issuers, etc). Notice how you don't really see any new banks being created? Why are bank stocks up 30% from pre-pandemic levels?

Put this into context. The 12 trillion in new spending/money allocation due to covid results in $36,000 for every man, woman and child in the United States. The government could have cut a 5 figure check to every person in America to deal w/ the fallout, or a fraction of the people most affected. Instead we decided to give it to large institutions. And we're arguing over 1,200 vs 1,600 stimulus checks.

This is key. GP is right that a bond crash would hurt everyone, but generating stimulus and routing it away from the working people is just trading pain now for more pain later - the bill will come due. There's no magic here.

Handing everyone a check directly increases inflation. There is no increase of the supply of goods, so everyone would competing for the same things and prices, raising prices. Poorer people spend more money paying off debt or purchasing consumer goods, so most of that money flows straight to the top anyways. Since this money comes straight from the money printer rather than through taxes, this means that the wealth gap gets exacerbated through stimulus checks.

Purchasing assets introduces liquidity, but isn't equivalent of handing people money. The Fed receives the equivalent value in the form of debt.

In theory, the increased demand that might cause inflation could be partially or fully cancelled out by a tax increase. (In practice, Congress is unlikely to do it.)

It looks like we are seeing supply bottlenecks in certain areas. The price of lumber is bottlenecked by sawmills and electronics are bottlenecked by fabs.

But I wonder what’s not bottlenecked that could absorb more demand?

The GDP is very high versus what most poor people have to spend, so I can't imagine this inflation is much of an issue.

There's more than enough stuff for people to be buying

Market corrections are natural and useful. Every time we print huge sums of money to rescue equities and make debt cheaper, who benefits?

Those with a high ratio of assets/credit to living expenses.

While market corrections create a higher degree of short term pain, allowing them for the last five decades would have gone a long way in preventing the increase in wealth inequality.

It doesn't make sense that investing in SPX is a guaranteed long term 10%/annum investment while nominal GDP growth is under 3%. It's an engineered phenomenon and benefits those who already have a lot of assets.