“This is a wartime level of investment into our nation.” A statement made by Senate Majority Leader Mitch McConnell is just as staggering as the amount of the approved stimulus package – $2 trillion.
Designed to aid the economy and support businesses and laid-off workers to survive the cul-de-sac, the Senate unanimously passed the pandemic stimulus bill late Wednesday night. At more than twice the size of the 2008 crisis recovery act, Washington is taking extreme measures to keep the US economy afloat. However, many fear that this amount is hardly going to be enough and far bigger compromises will have to be made in order to plug the devastating damage caused by the coronavirus pandemic.
“This is a medical crisis; this isn’t a financial crisis. But it’s a thing that nobody has seen for many, many decades,” said President Trump.
While Mr Trump’s statement may sound somewhat reassuring today, the medical crisis can easily transform into a credit and banking one. Financially speaking, the affected sectors already include stock market, unemployment, small business, supply chain, airline, industrial, and the list goes on.
Should all previous attempts fail, the stimulus package and the Federal Reserve’s ability to provide additional $4 trillion in lending power, the total amount would become “the single largest Main Street assistance program in the history of the United States”, White House economic adviser Larry Kudlow pointed out.
While the cosmic amount of the package should have put the US citizens’ fear at bay, Treasury Secretary Steven Mnuchin gave a bleak forecast that the bill should be sufficient to sustain the economy for three months.
“That is a drop in the bucket,” Democratic New York Governor Andrew Cuomo was even more pessimistic in his report on Wednesday. “We’re looking at a revenue shortfall of $9 billion, $10 billion, $15 billion. New York City only gets $1.3 billion from this package.”
Another big question is how quickly can the economy rebound. President Trump announced that the economy would take off like a “rocket ship” once the pandemic passes.
Such dubious statement has left many business leaders and experts dazed. After all, there is no possible way one could guarantee that Americans will fill in restaurants, book multiple holiday destinations and resume their usual shopping behaviours short after the crisis is officially over.
“The true scale of this crisis, and the economic damage created by this public health disaster, will extend beyond the scope of this historic bill,” said Roger Dow, president and CEO of the US Travel Association. “It’s sad, but it’s true, more help will be needed soon.”