Economic updates – How the pandemic affected 2020

COVID-19 has become the greatest threat to humanity that the world has ever seen. According to the WHO, the virus detected in China has spread to more than 200 countries. It has infected about 26,763,217 people and caused 876,616 deaths around the world.

The United States of American is one of the top virus-stricken countries in the world. Since January, more than 6 million people have been infected in the States, and the death toll raised to 189 thousand casualties.

Besides healthcare and education, the pandemic has caused unparalleled damages to the economy of the country.

The rate of unemployment increased to 14.7% in the country in April. In addition to that, the S&P 500, stock index that measures the stock performance of the top 500 companies of the country, dropped dramatically and hit the record lowest value between March 2020 and April 2020, after the lockdown happened

The pandemic greatly affected the GDP too. According to the “advance” estimate released by the Bureau of Economic Analysis, Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020. The reasons for this massive decline are apparent.

The consumption industry, which makes up to 70% of the GDP, has slumped because of the closure of the business. Besides, investments that constitute 20% of the GDP have also come to a halt. All these factors have contributed to substantial economic losses.

Covid-19 updates Man and woman COVID-19 masks, standing behind the bars of a gate. Symbolizing COVID-19 updates on the tourism economy
Nowhere to go

Tourism in the country also couldn’t escape the damages of the pandemic. As international flights stopped, and tourism spots closed to impede the spread of the virus, the economy could face a drop of 355 billion U.S. dollars in 2020 in the industry.

Coronavirus has not been easy for the whole world. What’s clear is the virus is not going anywhere until the vaccine arrives. But the countries are slowly opening the businesses to compensate for the losses that the virus has imposed. As industry across the States started reopening, the unemployment rate dropped to 8.4 percent in August, and the S&P 500 index also started soaring, but, still, the country has a long way to go to put the economy back on the pre-pandemic track.

Americans still waiting for leaders to decide on an economic stimulus package

The impasse over the budget for a Covid-19 stimulus package between the Republicans and the Democrats continues. Now, Americans still wait for federal aid to support their post-pandemic lives

In the subsequent rounds of the negotiations over the second coronavirus stimulus package. Democrats and the Republicans could not come together over the costs. When the Democrats joined the negotiation table, they said they wanted the HEROS Act worth $3.4 trillion to pass. The Republican representatives could not accept that and proposed the HEALS act, which cost around $1 trillion.

Initially, both parties didn’t seem to step back from their proposals. However, after having a conversation with Republican negotiator, White House Chief of Staff Mark Meadows, Nancy agreed to show some flexibility. She decided to come down to the $2.2 trillion, but no less than that.

one hundred dollar bill resting atop a covid-19 mask. Symbolizing the delayed Covid-19 stimulus package
A problem presents itself

“We have said again and again that we are willing to come down [and] meet them in the middle. That would be $2.2 trillion. When Republicans are ready to do that, we’ll be ready to discuss and negotiate. I did not get that impression on that call,” told Pelosi to the reports.

The White House, on the other hand, agrees only to add $300 billion to its proposed budget. Their final proposition for this package is $1.3 trillion. But it says that if there is any need for the extra money in the coming days, the government will undoubtedly do more.

“As you know, we put $3 trillion into the economy when the economy completely shut down, and we’ve now reopened the economy. Let’s do a more targeted bill now. If we need to do more in 30 days, we’ll continue to do more, but let’s not hold up the American workers and the American businesses that need more support,” said Treasury Secretary Steven Mnuchin in an interview with Fox News on Sunday .“The president and I couldn’t be more pleased with the way the economic plan is working,” added Mnuchin.

Both the Democrats and the Republicans have consented to add federal unemployment boost and stimulus checks. After the August recess, another round of negotiations should start on September 7. Moreover, the hope is this time, both the parties would agree on all the terms, and the final plan would come soon.

Update, the negotiations over the next Covid-19 stimulus package are dead in the water. At this point, Americans can only hope for a hail mary. Both political sides have plans that, quite frankly, cost too much. Moreover, the money they plan to spend doesn’t go to all the right places.