Question

To what extent the government response in each of the three countries USA, UK, and Germany was effective in containing and solving the crisis? In addition,

1. Which government was the most effective in containing and solving its country’s crisis? Explain briefly.

Answer 1

The whole world is facing the biggest crisis of its times, i.e. the spread of COVID-19. Being one of the highly contagious disease it has throttled the world economy more severely than the economic crisis of 2008.

Some of the largest economies of the world like USA, UK and Germany are taking extraordinary fiscal and monetary measures to impel themselves through the critical phase. Initially all three were taking similar measures in containing and solving the spread of the disease by -

- inorder to contain the outbreak of COVID-19 crisis, the governments chose to shut all economic and social activities happening in their countries effectively through partial or full lockdowns.

- all the non-essential productions and supply were stopped for the time-being

- residents were asked to stay at home, while work from home was increased

- testing was increased and required health facilities were provided to the patients

The countries slowly started re-opening its economy as they thought they have contained the crisis to some extent.

The government of USA somehow failed to control the spread and providing proper health management facilities and faced huge unemployment and falling growth rate of the economy. But the monetary and fiscal policies somehow controlled the situation.

The government spending got increased, the central bank infused more liquidity so as to revive the market.

The business organizations were provided with interest free loans and grants to pay the wages/salaries and carry out the investment and production work.

More financial aids were provided to the hospitals to increase the testing and cure the infected.

The government of United Kingdom (UK), decided to intervene in the decisions of British State, to support the economy by taking proper financial measures.

-wages and salaries of the workforce was paid from the treasury

-taxes to be paid in future

-unemployment benefits were raised

-provided easy loans to small business houses

The government of Germany did the best so far in containing and solving the problems arising from the crisis.

The companies of Germany shifted its workers to join government's short-term working programs in the starting period of the spread only. This reduced the issue of unemployment to a greater extent.

A balanced budget was formed by the government which provided grants and loans to the most affected business groups.

The economy of Germany was reopened from mid-April only, as the spread of the disease was under control and bold fiscal and monetary measures were taken in advance.