Question

Congress and the President just passed a bill that will inject an EXTRA $2 TRILLION, or $2,000 BILLION (more or less) in spending into the U.S. economy. To TRY to put this into context, our federal government typically spends about $4,400 billion IN A NORMAL YEAR. 1. Do you think this is a good idea? Or a bad idea? Why? 2. If the American people ‘still need help’ 3 or 6 months from now, should our government spend EVEN MORE MONEY at that time to help them? Why or why not? What is your definition of ‘still need help’? 10% unemployment? Less? More? Why? 3. Given this incredible moment in history, as a nation, should we PERMANENTLY CHANGE programs --- including direct payments to people ---so that more money is injected into American households? No? Yes? If so, how would you pay for it?

Answer 1

Covid-19 pandemic has brought unprecedented economic downturn to the country. The measures taken to control the spread of the virus, partial lock down of the country, shutting down of businesses, factories, and industries has led to millions of job losses, and subsequently steep fall in incomes of the general people in the country.

In order to revive aggregate demand and overall economic growth the government announced unprecedented fiscal policy and monetary policy measures. The federal government has announced to inject more than $2 trillion in the economy, mainly in the form of cash transfer to families, and support to the businesses in the form of credit and cash.

I think it is a good idea. According to the Keynesian macroeconomic theory, in times of economic slump, government should increase it spending which has a multiplier effect and revives aggregate demand in the economy.

Our government should help the families and other negatively affected people due to the disease spread, untill the pandemic fears have gone down drastically, as it will help the economy keep moving. Still need help means, those people who still can not join their workplaces or start regular job to support themselves financially.

No, I think government should only intervene during times of recession or general downtrend in the economy, as doing so in normal times will work against the free market policy, which may harm the economy in the long run.