Up until a few weeks back, we discussed the United States of America as the efficient world leader and the globe’s top economy. In this article, we discuss the country as the most- victimised region of a pandemic.
With its epicenter in Wuhan City of China, the novel coronavirus has engulfed every continent into its vicious realm and continues to wreak havoc on human lives. Globally, almost 2.5 million confirmed cases of COVID 19 have been reported to World Health Organization (WHO), and over 178k deaths. And it does not stop here, the world has a long way to go as the novel coronavirus is likely to be with us for a long time.
Even when stay-at-home orders and other physical distancing measures have effectively suppressed the transmission of the virus in countries, it continues to remain extremely dangerous, keeping most of the world’s population susceptible to its treacherous effect. What is worse is the fact that there are chances of the plague to re-ignite!
In response to the health, economic and business emergency, countries have been implementing a range of measures including travel restrictions, mandatory hygiene norms, social distancing, declaration of states of emergency, closure of schools, institutions and non-essential businesses, and increased testing.
Governments have been launching stimulus packages to inject liquidity in the plummeted economies and aid citizens and businesses in the current unprecedented and challenging times. Recently, a new package was launched in the USA, wherein the US Congress passed a relief package totalling USD 484 Billion.
Let us deep dive-
USA’s USD 484 Billion Economic Relief Bill
The US Congress has unanimously passed a new COVID 19 relief package worth USD 484 Billion, the fourth emergency coronavirus response bill in the country, which was approved by the House of Representatives with the aim to support small business aid fund, while funding hospitals and virus testing.
The bill, which is an interim measure and is being referred to as the Economic Relief Bill is expected to provide an economic safety net. It brings the total federal spending on the virus relief to up to USD 3 trillion. It should be noted that Washington has recently launched the largest economic stimulus package in the history of the USA last week, infusing USD 2 trillion in coronavirus aid.
The Economic Relief Bill was passed after the unemployment report from the country, which demonstrated that more than 26 million Americans have filed for jobless claims in the last five weeks.
President Donald Trump is likely to sign the bill real soon for it to become a law, as the COVID 19 pandemic has been ravaging America, shuttering small businesses, killing thousands of people, and leaving Americans unemployed.
Experts believe that the bill is a strong step in the right direction and can help small businesses keep employees on their payrolls until the American economy can be reopened again. It can also compensate for any probable inequities in the US financial system.
US Stimulus Packages- A Backdrop
Addressing the widening outbreak of COVID-19 in the country, the US took a number of measures besides travel restrictions, lockdowns, and closure of non-essential businesses. Some of these are listed under-
- An estimated USD 2.3 trillion (around 11 % of GDP) Coronavirus Aid, Relief and Economy Security Act (“CARES Act”) was introduced
- USD 8.3 billion Coronavirus Preparedness and Response Supplemental Appropriations Act and USD 192 billion Families First Coronavirus Response Act was also launched, which together provide around 1 % of GDP
- Federal funds rate were lowered by 150 basis points in March to 0-0.25 basis points
- Federal Reserve also introduced facilities to support the flow of credit, backed by the Treasury using funds appropriated under the CARES Act in few cases
- Federal banking supervisors encouraged depository institutions to use their capital and liquidity buffers to lend, to work constructively with borrowers affected by COVID 19 and facilitate loan modifications
- Community bank leverage ratio was lowered to 8 %
COVID 19 Situation in the USA
According to a JHU CSSE COVID 19 dashboard, as on 25 April 2020, the US had more than 890k confirmed cases of the virus with close to 51k deaths. The country has been conducting tests actively (beyond 4 million so far).
The country, the world’s superpower as some call it, has been by far the most adversely affected region with maximum confirmed cases. What remains worrisome is the fact that there are reports of ongoing protests in the country for lifting the lockdown as the economy is suffering with businesses closed, which can (and is likely to) result in long-term damages.
The so-called anti-lockdown protests demand a swift reopening of the economy which is grappling the virus’ consequences. Even though a few US states have started to reduce restraints, by opening parks and beaches again for people along with a few small businesses in the upcoming days, a majority of the nation continue to be under some form of stay-at-home order.
Health experts have been constantly advising against the move, with a majority even suggesting an extension of the current lockdown period.
Clearly, it is too early to conclude anything pertaining to the virus. The silver linings- in the form of medicines being in pre-clinical and clinical trials, hefty government support, philanthropists offering all they can and countries doing their best to keep the virus at bay from people by mandating lockdowns and likewise orders seem to be doing its part, but the question remains- will these measures suffice?
While we adhere to norms and hope for a better and stronger world soon, let us leave the question to time- which has the power to heal everything.