On March 27th, President Trump signed a historic deal that provided a 2 trillion dollar stimulus package to jumpstart an American economy reeling from the shocks of the coronavirus pandemic. This landmark deal, one of the most expensive and expansive deals Congress has ever considered, comes after receiving bipartisan support in the House and Senate, with the legislation passing unanimously in both chambers earlier that week.
The stimulus is much needed to relieve the current state of the economy and address the economic fallout of the pandemic, with federal estimates placing the current unemployment rate during the pandemic as high as 13%. The bill provides funding for direct payments to households, loans to small businesses and distressed companies, and unemployment insurance benefits. The legislation also infuses money into an overwhelmed healthcare system and local or state governments in need of more resources. Many state governors, including New York governor Andrew Cuomo, are calling on the administration to provide their hospitals with more supplies like ventilators, face masks, and gowns.
But the two trillion dollar deal passed last month has proven insufficient to support America’s worsening economy and the steadily rising unemployment rate. House Speaker Nancy Pelosi emphasized during the initial bill’s hearing in the House that “this cannot be the final bill” and outlined issues like “bigger direct payments, expanded eligibility for family and medical leave, and more grant money for states.” Congressional leaders and Trump are discussing a second assistance package that could cost up to another 1 trillion dollars. Democrats are pushing for further relief measures to help hospitals and healthcare workers, and Republicans are lobbying for the expansion of the small-business loan program, among others, but both parties agree that a second relief bill is needed.
Italy, the country with the most COVID-19 related deaths globally, rolled out its second in a series of relief plans to help the nation on March 28th. The strict government restrictions in Italy designed to contain the coronavirus have put a massive strain on the Italian economy, foreboding a deep recession for the world’s eighth largest GDP that will send ripple effects across southern Europe.
Italy’s Prime Minister Giuseppe Conte announced that the package included 4.3 billion euros (4.79 billion USD) immediately directed to cities for distribution to citizens and into a special fund for “people who don’t have the money to do their shopping.” This set of measures followed the passage of a larger 25 billion euro stimulus package earlier in March and anticipates one of the same size promised for April. Italy’s Economy Minister Roberto Gualtieri emphasized the need for a “great Marshall Plan” for the reinvigoration of the European economy as a whole at the end of the pandemic.
Before the COVID-19 outbreak, China was preparing to celebrate the impressive feat of doubling its economy in just a decade. Now it appears that the long-awaited goal has been abruptly deterred, especially considering the lack of economic stimulus from the government thus far. Since the initial spread of the virus from Wuhan in early January, China implemented a strict lockdown on its citizens that brought the disease under control domestically in mid-March–sooner than expected. The lockdown caused severe economic damage to China, and the government, along with the People’s Bank of China, has been injecting cash into its financial system. However, no large-scale fiscal stimulus package is being proposed to assist in the recovery for the world’s second largest economy.
On April 6th, Japanese Prime Minister Shinzo Abe announced a similar relief package as that proposed in the United States. The 1 trillion dollar stimulus package, the largest ever in Japanese history, is meant to save the hard-hit economy after a severe outbreak of COVID-19. The package equals about 20% of the nation’s economic output and includes handouts for small businesses and households and offers businesses deferrals on tax costs. The second phase of the package aims for a V-shaped economic recovery and fiscal support for the impending recession in Japan.
Countries around the world affected by the coronavirus are each implementing plans to rehabilitate their economies after a long period of quarantine and economic paralysis. The stimulus bills passed by each country are investments back into their own economies, which will be the answer to keeping families and businesses afloat during and after the pandemic.
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