Question

“The U.S. House of Representatives on Friday approved an unprecedented $2.2 trillion stimulus package to alleviate the economic devastation of the coronavirus pandemic and sent it to President Donald Trump to sign into law.” 28 March 2020 Below is one of the elements of the package: Enhanced unemployment aid Payments for jobless workers would increase by $600 per week. Laid-off workers would get those payments for up to four months. Regular benefits, which typically run out after six months in most states, would be extended for an additional 13 weeks. Self-employed workers, independent contractors, and those who typically don’t qualify for unemployment benefits would be eligible. The government would also partially make up wages for workers whose hours are scaled back, in an effort to encourage employers to avoid layoffs. Estimated cost: $260 billion

How do you think the above -mentioned component of the package could affect unemployment rates and GDP of the US?

Answer 1

About 3.3 million american people have filed for this unemployment benefits as the outbreak of corona virus has forced many americans to shutdown their business.

The CARES act is providing these unemployment insurance,also for people who are not eligible at the state level.The package provides $250 billion for unemployment aid,$350billion as loans for small run business,larger industries will get subsidized loans and other significant help for hospitals.

These insurance package will provide relief for individual who are hardly hit by the pandamic.and the package has helped low- income households recover short term period by paying for housing and for food and bill payments,the cash is directed to state and local government,hospitals and small business will helps to approach 30% quarterly of gdp.

About 25 million americans have lost their job due to these crisis,From june to september the consumer spending has helped to gain 2.8million jobs which helps to raduce the unemployment rate to 1.8%.

The economic data in april to may show that the gdp of US shrinks at an annual rate of 32.9%.it was the greatest decline since in gdp records back in 1947.but after establishing these package helps around 70% of americans to get back work which prevents the further reduction in gdp .