Economic Response - Usa
COVID-19 Economic Response: USA
While President Trump constantly claimed that his response to COVID-19 had been ‘one of the best in the world’, many in the rest of the world and within the USA begged to differ. The USA was without doubt slow to respond to coronavirus on a health level and was then forced to spend big dollars on supplies for the health system. The government introduced a range of economic responses, but with unemployment up around 22 million, questions continued to be asked around is it enough to stave off a full blown depression.
One of the issues which became quickly clear as an obstacle in the USA, is that it certainly is not a united state of states. The criticism, conflict and controversy between individual states and between state governments and the federal government have without doubt hampered the US efforts to deal with the entire COVID-19 crisis. The US situation is in stark contrast to Australia where the Prime Minister quickly established a National Cabinet to ensure collaboration and cooperation at all levels of government.
New York became the first epicentre for the virus in the USA and shutdowns and lockdowns exposed many businesses and individuals to financial distress. As the lockdowns spread across the states along with coronavirus outbreaks, the unemployment figures soared to over 22 million.
The USA economic response include a Paycheck Protection Program of $350 billion in forgivable loans for businesses along with other measures and a cash handout to individuals of $US1200. Billions is also being poured into the healthcare system and for businesses working to develop a vaccine.
But one of the major issues was in the procurement of PPE and other essential medical equipment. With limited supplies on a global level not only were different countries in a price competition to secure the supplies they needed, the US Federal Government was competing with its own states! Then the states seemed to have to wrangle supplies from the national stockpile. It appears that millions of dollars that could have gone to assist the unemployed, closed businesses and other needy people were being spent on highly inflated prices for PPE.
The judgement on the slow and likely inadequate economic response was left to Wall Street. The already volatile stock market reacted negatively, sending stock markets globally into the lowest levels since the GFC and even before that.
But through it all, the President continues to hold press conferences full of self-praise and major claims of assistance and spending. Claims which are often decried quickly by media and economists.
It no longer appears to be a question of if the US will go into a depression but how deep and how long that depression will be. And amidst all this, the country goes to the polls in November for the 2020 Presidential election. Interesting times.