In response to the economic fallout from the spread of Covid-19 in the US, the Senate has passed a bill which will free up $2 trillion to be used for a coronavirus relief package.
Since the outbreak of the coronavirus in January 2020, economies around the world have fallen one by one, with each having to scramble together an emergency economic response plan. Following similarly dramatic policy announcements in the UK and across Europe, households and businesses in the US will be glad to finally have some clarity over how the government plans to support their livelihoods.
The fiscal stimulus, which still needs to be passed as legislation by the House of Representatives, includes a wide range of measures with a clear focus on helping individuals, the healthcare system, small businesses, and the American aviation industry. See the graphic below for some of the key takeaways:
How much is $2 trillion?
The fiscal stimulus is an unprecedented amount of money, and will hopefully be sufficient in rescuing the US economy from the jaws of a potentially huge economic crisis. For the most curious of economics students though, there is probably one question on your mind: what does $2 trillion dollars even look like? Well, look no further than the diagram below to find out!
Q1. What is meant by the term ‘fiscal stimulus’?
Q2. Outline the main components of this $2 trillion dollar stimulus.
Q3. Evaluate the impact that this fiscal stimulus is likely to have on the American economy.
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