As we all know, COVID-19 has been affecting people all over the world, especially financially, as many people are being laid off as they can no longer work right now. Obviously, this is going to have some kind of affect on the economy. The Washington Post has reported that the U.S. federal government is on track to spending $4 trillion more than they collect in revenue. This means that all the money the federal government has made in this past year is $4 trillion dollars less than what they are planning on spending! The U.S. government is already in debt (if you want to see it and cry, click here), so this is personally very concerning. I know that many people are freaking out because this economic crash and unemployment rating is looking like what we saw during the Great Depression in the 1930s. President Trump made an announcement in the last week saying he wanted to push more money into the economy with a $1.2 trillion dollar "rescue-plan" that would include giving direct payments of $1000 to most Americans.
I personally don't know what the best solution here is. I think that supporting struggling Americans should be the #1 priority, but that's also an expensive way to think.
What do you think about Trump's proposal?
(sensitive question) How are you and your family being affected by this economic crash?
People losing their jobs due to the pandemic connects to the different types of unemployment we've been talking about recently in class. What type of unemployment do you think this is and why?
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2 comments:
To be honest, with everything happening in regards to the economic level, I think it's good that Americans are receiving some money from the government since that helps push the production, circular flow diagram. Initially, people were trembling when they found out about the shelter in place and took out all of their money from stocks (even in Gold which is crazy since that never goes down), causing the DOW to hit its lowest value since 18 years (which is our lifetime and that is also crazy). But by giving money, Americans feel more confident and reinvested in the economy, spiking the DOW to about 24k points, an all-time high in a record amount of time. I am not sure if the amount of money he is giving is too less but I hope it helps those who are in a financial gridlock. Moreover, I really liked how Governor Newsome was going to give $125 million to undocumented Californians since they would not get any money from the stimulus bill.
While it is good that during these difficult times, people that are struggling may have relief, and I know that $1000 could definitely help people, I wonder how this will affect our already significant debt as a country. Trump promised that he would decrease the national debt, and instead increased it significantly. He has recently complained about the crisis and its negative effect on the economy, and he is right since many workers are at home. So it's a bit concerning for Trump to give out a tremendous amount of money when the economy is already in a crippled state with a $22.7 trillion debt. In addition, I'm curious as to who will be receiving the money. It is understandable that those in poverty should definitely receive it but I'm sure that the amount will not be equal for everyone. It appears that those in middle to upper class who have maintained their jobs at home and are not struggling would not receive as much, but Trump has a track record of favoring the wealthy seeing as he himself was very wealthy before gaining power. I am uncertain about who would gain the payments, and how it would be ensured that those who really need it receive it.
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