With the coronavirus cases in the US growing at an increasingly rapid pace, restrictions on businesses are being imposed without any financial support from the government.
More than a million new cases have been reported this month and hospitals are exceeding capacity while lacking the resources needed to manage this health crisis. Some states have imposed strict restrictions with hopes of decreasing the spread of the virus.
Initially, the White House and Congress released a stimulus package in April to support people facing unemployment as well as to stimulate economic activity. However, the package is set to expire in December this year and a new package can only be announced once the new administration takes over.
Biden’s chief of staff said that even though many things will be delayed until Biden is officially the president in January, this cannot be ignored any longer as it is vital to address the increasing unemployment rate nationwide.
Biden and Harris are soon set to talk to the public about economic recovery in Wilmington, Delaware. Even Donald Trump tweeted that he was in favor of reaching an agreement over this issue now.
However, Republicans and Democrats have differing views about the stimulus package, the former in favor of a package worth more than $2 trillion whereas the latter believes they don’t need to spend such a huge amount.
Due to this, economists fear a decision on the package will not be reached soon and people, as well as businesses, will be left with no support while people continue to lose their jobs and businesses keep getting shutdown.
A senior economist at JPMorgan Chase believes that if the stimulus package is delayed and is smaller than the one before, it would hinder the growth of the already wavering economy.
The Democratic speaker of the House of Representatives, Nancy Pelosi, has announced that the stimulus package is extremely crucial and will be their top priority.
The economic situation of the country is putting increasing pressure on the Federal Reserve to provide further support. Although, it has already provided a large amount of monetary support and is unable to directly aid workers and companies who are suffering.
Standard Chartered’s head of North America Macro Strategy suggested that to facilitate struggling businesses, the Fed could help by expanding its credit facilities as well as increasing its asset purchases.