The fiscal stimulus that Federal Governments should take in response to the negative impact caused by a coronavirus.

The fiscal stimulus that Federal Governments should take in response to the negative impact caused by a coronavirus.

The primary purpose of this research paper is to present the fiscal stimulus the federal government can undertake the negative impact on the economy as a result of the coronavirus pandemic. Taking stimulus measures is imperative to the federal government on responding to the adverse effects of this pandemic as it will provide remedies to the growth of the economy. Most of the companies are under lockdown, while some encourage their employees to work at home. Through this order, the locked-down firms forced their staff to stay home, which results in no salaries. Besides, though the production companies are still on the operation, the quantity and quality of the products are going down to the extent that the supply is limited.

Due to the stated adverse effects, the federal government has no otherwise but taking fiscal measures to curb them and the immediate consequences. One of the economic stimulus measures that the federal government can take is to authorize a two-year employee’s tax holiday. It suggests that it could help to render the economy along with the significant population of the middle class (Gourevitch et al., 2016). Through this, it will boost the buying power of these middle-class customers hence increasing the growth of the economy during this time of the corona Virus Pandemic. Utilizing the “V” shape fiscal stimulus is another good move as it will allow the federal government to create budgetary measures that match the timing and severity of the economic disruptions.

Another step they can take is to encourage the banks and other financial institutions to raise the possibilities of taking actions, including the fiscal measures where appropriate. The banks and other financial institutions may be reducing the interest rates to their debtors who have loans.  In addition to this, elongating the time taken to repay the loan is imperative as it will give time for them to be able to purchase their basic needs hence enabling the smooth growth of the economy during this hard time of Corona Virus Pandemic. Offering loans at low-interest to firms affected by the impermanent coronavirus interruptions; expanding the joblessness protection and other straight costs to their citizens is another positive fiscal measure for the federal government to take. Moreover, it should give aid to state and native governments losing cash because of the coronavirus pandemic.

At the same time, federal management can allow politicians to be answers to this crisis. To implement this, letting the politicians be friendlier to getting some financial bundle through is the first step to enhance the growth of the economy during these hard times of the Corona Virus Pandemic. The plan can also include the provisions of less directly connected to talking about instant impairment from the virus, such as inspiring the scientists to manufacturing clean energy investments and pharmaceuticals.

Preparing for fiscal expansion is also an imperative move from the federal government to assist in handling this economic crisis and illustrating a difference between expenditure needed to discourse the common healthiness hazards from the coronavirus pandemic (Seip, 2016). Purchasing things like medicinal paraphernalia and assisting the states dealing with the disaster and the type of spending that may be warranting propping up overall demand in the economy. Most of the fiscal stimulus scenario, the goal of the federal will be to place more cash into the government’s purloins. These include employees’ tax reductions and provide extra substantial redundancy assurance profits, to warrant that all coronavirus economic disruptions do not spill out into a full economic recession.

Aggregating requests in the budget for a sector or two will also assist in the process of handling adverse effects on the coronavirus pandemic. Discouraging the widespread embraces of the monetary policy as the virus’s financial effect widens will help in taking the necessary measures. Making sure there are fewer declines in the stock market, is a positive move in alarming the broadcasting and small interest rate slices by the National Reserve. Through this, the federal government will modify the outlook to justify the nine-figure stimulus package.

In conclusion, if the federal government and Congress do not take the necessary step in the direction of economic incentives in the coming weeks, it will be an unusually rapid answer to a fiscal menace, which will cause financial position deteriorations. Whether it would ultimately pass, of course, is a negative impact on the economy. The consideration of these economic strategy measures imitates the little space residual for the National Reserve to amend interest rates, which is the standard first line of the protection against financial falls (Yi, 2016).

References

Gourevitch, P., Martin, A., Ross, G., Bornstein, S., Markovits, A., & Allen, C. (2016). Unions and Economic Crisis: Britain, West Germany and Sweden. Routledge.

Seip, J., & Harper, D. W. (2016, May). The Trickle-Down Delusion: How Republican Upward Redistribution of Economic and Political Power Undermines Our Economy, Democracy, Institutions and Health—and a Liberal Response. UPA.

Yi, W. (2016). Making Of An Economic Superpower, The: Unlocking China’s Secret Of Rapid Industrialization. World Scientific.

Zimbalist, A. (2016). Circus maximus: The economic gamble behind hosting the Olympics and the World Cup. Brookings Institution Press.