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According to Brookings Institute if the US government passes a $2 trillion (stimulus) bill, then there’s a good chance that they can revive the US economy to pre pandemic levels by mid 2021. However will the US government actually approve such a huge stimulus bill?, and what happens if it fails to revive the economy then how will they fix it?. Lastly what do you’ll think about this huge stimulus bill should the US government actually approve it.?

Source:

https://money.yahoo.com/coronavirus-stimulus-a-2-trillion-bill-would-bring-the-us-economy-back-to-prepandemic-path-in-2021-brookings-finds-210605554.html

It'd be interesting if this becomes the new way governments deal with economic crashes in the future (and a welcomed one).

If they follow that advice and only invest in the people rather than the markets/walls St then they'll do much better for everyone...

Please make it to pre 1900 economy or even more primitive Stone Age. Inb4 time traveller is real.

I think it all depends on the second corona wave. If the pandemic is getting worse the chances are very high for the government to push such a bill through. But will this stimulus actually work to bring back the economy to pre pandemic levels? I am not sure about this one. With so much money being injected into the economy we will likely see an increase in inflation in the near future. Also the rising levels of debt will likely increase financing cost in the future.

The oncoming second wave doesn't look great. First time around, we had (Northern hemisphere) summer coming, when everyone would be outside and transmission lower. This time around we have winter coming, when people will be spending more time indoors and so higher transmission rates. If we add to this that we've already had one lockdown and governments are reluctant to implement a second because of the economic damage caused by the first, and then we add in the lockdown-fatigue in the general population... everything points to the second wave being worst than the first. I think it's unlikely that governments will have learned any lessons, they're just acting as they did before... it's all about short-term decisions made too late, and about their position in the opinion polls.

(edit for spelling. tsk.)

I agree that for others who say that everything will depend on how big the second wave of the pandemic will be, and what is currently happening in Europe suggests that the second wave in the number of infected will be even more than ten times more pronounced if judging by current figures. Free money is certainly something that helps in the short term, but the fact is that in the long run it can have quite negative effects on a country's economy.

Although when we talk about the amount, $1.9 trillion is a huge amount of money and no one will just so easily decide to pump that amount into the system unless it is really necessary. Some think (at least according to the article) that it is last moment for such a decision to be made or recovery will be much slower and the results much worse.

High obesity, american diets, could be one key underrated reason for corona virus impacting the united states harder than abroad. Obesity and poor health associated with standardized american diets could guarantee americans remain a higher risk demographic, no matter how much capital is injected into the economy.

Barack Obama passed a $1.4 trillion dollar stimulus bill to counter the 2008 economic crisis. It didn't achieve anywhere near to the quantity of positive results one might expect from such a large sum of money. I think its safe to say $2 trillion won't do anything to fix problems. Lockdowns are the cause of job loss and business being destroyed. Throwing money at lockdowns won't change anything, as long as lockdowns remain in place.

Covid 19 not left the US economy too.The comparison of US economy with now and 2008,since we know how it affected the US Economy.But the intresting one is,their is no corona at the time of 2008.If the bill is real,this money will surely had a good impact on the US Economy for sure.But before 2021 it was huge time to get back to original economy.

The US government will have to approve a new 2 trillion dollar stimulus pack,because there's no other option.
Will such bill revive the US economy on pre-pandemic levels?It depends on how the pandemic will continue to spread inside the USA.If the lockdowns return and small and medium-sized businesses close again,then the answer is no.If the pandemic begins to slow down(which is highly unlikely to happen) and there are no lockdowns,the stimulus pack will revive the US economy.

Before more money is pumped into the economy of the USA, let's be focused on what makes the government spend so much. Could it be;
1. Security
2. Health
3. Education

These are some of the basic amenities faced by every government to tackle with alacrity. If the lockdown continues; we might likely not be able to say Yes in this scenario; because the government still has to spend on feeding the affected people with the virus. I'm sure they are professional economic developers to make use of the funds well.

Such a stimulus bill would be useful for businesses and individuals as it help to keep them afloat, but is a band aid solution which does not tackle the recurring problem.
Lockdown due to the virus has weakened the economy adversely, leading to decrease in production and loss of jobs, pumping trillions of dollars into the economy would stimulate spending, but would not improve production or increase employment except the Corona virus issue is tackled directly through a vaccine or herd immunity. Brookings institute is proposing a V-shaped recovery pattern as a result of cash injections, which I do not think is possible, especially with recurring waves of the pandemic spread.

It also begs the question of, where this funds are coming from. Most of this loans would be defaulted or forfeited by the banks, putting more strain on the money flow and further tipping the economy towards inflation. So even if there is an instant rebound in the economy, it would likely be a W-shaped pattern as the effects of excessive government interference in the market begins to reflect later on.

According to Wikipedia if we rank countries by obesity rates and we match it with the death rate we have something like this:

Country Peru Belgium Spain Bolivia Brazil Chile Ecuador USA Mexico UK

Deaths/1M pop 1,012 886 715 715 713 701 692 670 656 637

Obesity rate 19.7 22.1 23.8 20.2 22.1 28 19.9 36.2 28.9 27.8

Obesity might be a factor but it's clearly not a decisive one.


As for the new trillion injected in the economy I think nothing will happen not before the election and not before poeple will be able to estimate the impact of the second wave which is definitely coming in Europe.
Paris is going to enter a night curfrew from Saturday that will last till November, no activity between 9 and 6 o'clock, London might be the next in place and from there probably more restrictions will come in place, it's the cold  and flue season so if transmission continue we're going to see the economy taking another hit. What point would be in printing more money when everything is going downhill, it's better to wait it out and throw the money once there is a way to recover, not with everything shut down.

It will still change nothing, there is hyper inflation since early 19 century, except they wish to scrap US dollar and start affresh ( may be a fork of dollar perhaps ;D  ;D) which will not work in this state. This is side effects 9f centralizelation where sovereignty is given to a group of people to determine what people need and want.
Stimulus will help to revive back some business that has been down since the pandemic locked down, I'm not sure about the economy. I can only look forward the side effects of printing nonsense bill to the economy that will hinder inflation.

It is likely going to help but what all these funny economists forget to highlight is that they need to open up the economy also, all these economic downturn was as a result of locking down the economy and all the small businesses that help drive the economy need to close down and some of them are not coming back. 2 Trillion USD is a huge amount but the economy also need t be up and running to have a lasting impact on the economy

All I'm hoping for is that another trillion bill won't cause a strong inflation and push the economical situation off a cliff. But doesn't this move increase the national debt even more than it currently is? Last time I checked, it was sitting around $27 trillion..

How long could this keep going on for before it just can't anymore and the economy crashes like never before? Feel free to correct me if I'm wrong, but I feel like these bills are going to be a great facade behind which a monster sits ready for the action ..

I do agree with that, releasing their $2T to its people along with the opening of their economy combined will have a very good impact. And I think a lot of businesses are already slowly opening up. If we will get the vaccine by this end of year or early next year, more businesses will be active again.

its a stop gap and a hedge from a recession.  It is not meant as a cure all.  Eventually someone has to pay it back and unfortunately that is usually on the backs of the dying middle class.  :-\

I think its not all
They can bring more money if they want as the imf boss said thank God there is space in USA to print money "
Trump is intetested about money printing also.

But hey... The situation like that money Don't hurt us all the World need alad lot money now.

I suppose that stimulus bill won't bring back the US economy to pre pandemic levels as I think no other country could achieve that feat but it will significantly improve its economic fundamentals.

Additionally, the US must first must have zero infections first or be COVID-19 free before it can start gearing for a better economy comparable to pre pandemic levels.

My conservative estimate would be that it might take at least more than a year before such aspirations could be realized. Imho.

How high of a chance are we looking at here anyway? The US government would not approve of it if the chances aren't even at realistic levels, and if they even do so, a road plan, a proper one with details at the very minute levels are recommended for it to even happen. And even if they ever do this, more problems would crop up in the next few years due to the debt the US has increasing even more than it already has. Who would shoulder that burden then?

And if ever a second wave of the pandemic comes, just how big or how huge would it's effects be? It could even be completely possible to remove the benefits of that $2 trillion stimulus bill that would be released, and by then, everything would have been wasted. Not only did their debt grew, they'd probably have to increase it more just to react to the pandemic.

What's the point of this money? The only thing they can do is to further strengthen the meme "hehe printer does brrr" and no more. You know that no one can just print a certain amount of money for stimulus without consequences. They will just burn up by inflation and that's it. It is unlikely to get better, but it is quite worse.

If US Government knows their priority then for sure they can get back on their feet. In fact, they could have a prosperous country a long time ago if they did not prioritize military spending. Imagine if they cut out 75% of the military budget and put it into funding facilities for healthcare, labor and employment, education and drug rehabilitation. They could have solved the problems of the mentioned sector above if they focused on it. For example, if education has more funding then the cases of uninformed and idiot American will be reduced.

It is not a liquidity problem, it is a solvency problem. The problem with this type of measure is that you don't solve a solvency problem with liquidity. You relieve the sick person a little bit, but you don't cure them. The economy is sick because of the pandemic. The only real cure is to end the pandemic, either with vaccines or because eventually you get group immunity, but the bad thing is that there's still some time to go.

The last time they had a similar stimulus measure was sometime in 2009-10, after the economic recession. It helped in restarting the economy, but most of the money was used in recapitalizing major banks and other corporations. Very small fraction ended up with small and medium-sized businesses. I hope that this time it will not be the case. Because small and medium sized businesses are disproportionately affected, and they need this help badly.

If printing money can revive the fallen economy then every country can do that so actually giving stimulus is nit going to bring back the economy just in next 8 months, probably it will take 3 to 10 years to reach the pre pandemic levels,but wait we still yet to eradicate the corona virus completely so the real revival begins only after this corona ends.

It depends on how you use the money and not how much money you use. Do you know where all those billions and billions of dollars worth of companies make their money from? Customers, all of them need customers, without lower end and middle income people no company would ever make money all by itself, none of them.

This means if you keep pumping money to them but not to regular folk, those companies will keep on going down, they will get money to bail them out but since customers do not have money they will not be buying as much and that means companies will keep going down. However if governments do end up giving money to regular folks, maybe 2k for everyone including the homeless down the street to the biggest CEO, that could mean companies could profit more from all those customers having money to spend on them.

It's happens everywhere not just in US where small & medium business disproportionately affected.

But here we talk about US gov stimulus specifically. People do care so much due how big the impact of US investors into crypto market, large groups of investor bluntly announced they are doing crypto business... become a large financial advisor in crypto market and so on.
People now will get back to their business to have more than just primary needs with stimulus in hand as nothing to worry about how the future looks like with economic collapse, they do need this stimulus but could always be a boomerang as well.
Then,
What if the stimulus failed? I'm sure the instant effect will take place just like we are all witnessed the price of bitcoin moving fast from $10k to $11.5k . More than just like that , the economic damage is there haunting.
Beware , this gonna be a crucial moment.

It'll be more interesting to see how such a stimulus package gets paid for.  No doubt it'll be welcomed by the citizens of the United States, but there's no such thing as free money.  Somebody's got to pay back that $2 trillion, and I don't think anybody has a plan to not put the burden onto the taxpayers.

IMO the US economy is nowhere near as bad as it's being made out to be.  It took a temporary pounding because of COVID-19, but I'm pretty sure that'll all be settled after the election.  Guaranteed, because right now the politicians and the biased media are hyping up the dangers of the pandemic and using it to influence the election.

The US needs more jobs.  I don't really think it needs to take on $2 trillion worth of debt in order to stimulate the economy.

That depends how efficiently various bureaucracies spend the money.....good luck with that! :P

It also depends how much the BLS fudges their data when calculating economic output and related statistics, in an effort to make everything look rosy. Their track record is pretty bad there.


It's definitely possible. Trump is pushing for $1.8 trillion, and I think he has even said he would raise his offer from there. The House already passed a $2.2 trillion bill. It's Senate Republicans who are standing behind a $500 billion bill. Not sure how long before they fold to the pressure.

https://www.cnbc.com/2020/10/09/trump-raises-coronavirus-stimulus-offer-to-1point8-trillion-sources-say.html

Small and medium businesses are the most affected here since they don’t have much capital to cover such losses and yeah, hopefully it will be fair this time with fair distribution. Additional fund or this stimulus can really help a country to recover, though its not guaranteed since it will still depend if we finally see a vaccine or not and will depend on how the government will use that fund and how the businesses deal with this.

Well the first stimulus package certainly did something on the then ailing US economy on the first few months of the pandemic. It's not only the citizens themselves who benefited from that deal but also businesses where those money were spent. The money certainly made it to big institutions ultimately who provided necessities, services and other goods the Americans needed at the time. So all in all, the economy is somehow stimulated by giving 'free' money to the people.

For a second round of stimulus packages, Americans would definitely love to have a go at it, although it's like there's a tug of war between the Democrats and Republicans on passing this bill, especially since the election is coming and they are trying to make this as hard as possible for Trump. We might see another stimulation of the economy since the citizens have another buying power on their pockets, though that money isn't infinite and some other solutions have to be proposed in order to bring back the US economy to where it was prior to this pandemic. Hint: jobs.

In a situation like now the US government must accept a $ 2 trillion stimulus bill to be able to help the economy in the short term.
Although in the long run it will have a negative effect on the American economy, but will this stimulus be able to return America to
pre pandemic levels I am not sure. But the American government has no other solution, especially if the second wave of the corona
virus gets bigger, $ 2 Trillion of stimulus is needed. Indeed, being the leader of a country in a pandemic situation like now must have
the courage to make crucial decisions.

I agree with you that the 2 trillion bill should bring the us economy back into epidemic form. That's why us president donald trump has promised to sign the bill into law as soon as it is passed the bill calls for 500 billion in industrial aid for the corona virus and 300 for millions of families. In addition 350 billion in loan facilities for small businesses 250 billion in unemployment benefits and at least 100 billion in health care including hospitals will help alleviate the epidemic.

We still cannot say nor guarantee that once the $2 trillion dollar bill has been approve is that it can really boost up or revive the economy of US as the year 2021 enters our calendars the next year. But let us just hope for the possibility that it might made an impact on the economy somehow once it have been approved. May the government use it wisely for we are talking a decent big amount. The effectivity of the usage of that stimulus will rely on the government managing how they will implement the fair distribution and usage of $2 trillion dollars stimulus being proposed for the recovery of the US economy. Let us just all see what can happen once it have been approved and the action for the usage of it have already been executed because as for now, we really cannot assure that it can bring back the US economy for we still do not know if the pandemic is already over.

I don’t see this 2nd wave happening, and I think things will be a lot different, there is a vaccine on the way, lots of companies have been working on releasing vaccines and judging from the time that was given, I believe that very soon it will be out and they will vaccinate a lot of people to prevent further spread of the virus.

I am hoping that they do thisas quickaspossible, and probably there won’t be any second wave. Businesses have already reopened and looking the way economy dropped drastically in the lockdown worldwide, businesses are not ready to be locked down again, countries are not ready for that, they are trying to survive and you putting them on lockdown means that you just want to kill everything. Most focus should be cure.

On May I clearly can recall that there was a stimulus bill being passed and it was around 3 billion I guess.

This is not a permanent solution. The $2 trillion stimulus may keep the economy afloat for 4-5 months. But what will happen, in case the pandemic is not contained by then? IMO, spending money on handouts never works. Some of the recipients are going to use this money for productive purposes. But the vast majority are going to use it for unproductive activity. 

I don't think &2 trillion can bring back the US economy.
Covid-19 has collapsed the economy to lower level which $2 trillion will not be enough for them to rise the economy back to live as usual.
Many people that contacted the virus are still in the hospital which the government are still trying to get the vaccine which is too expensive for them to purchase. Many people lost their job during the pandemic which is causing them more hardship in the country.

No need to be too pessimistic. The infection levels are going down all over the world, perhaps with the exception of the European Union. With stimulus measures in place, the small and medium sized businesses should be able to stay afloat. And I am not that concerned about the vaccine. By the time it is available to all, the pandemic would be mostly confined to a few areas.

One question:
Where will the stimulus come from??
It will not only decrease the value of USD. But at the same time will make people to expect something more. Another stimulus bill maybe ?
They have to give them : JOBS " instead of spoon feeding once for the sake of the upcoming elections , they have to make sure that their life is secured and thus what they are doing right now is not only unnecessary, but it's also putting people in an awkward situation.
If you want to improve your economy " send some money into medical businesses instead of using it on combat equipments of police department, educate people , give them jobs , start producing more things in US itself "
What we need right now is :
Jobs
Better medical facilities
Education
Tackle homelessness

There's a few ideas floating around. One is having the Fed mint a couple trillion dollar coins, which the Treasury will use to issue new currency against. That's literal money printing. Another is the traditional route of issuing US treasuries, driving up the national debt even higher. From a conservative's perspective, the ideal is actually being able to pay for the stimulus measures up front by reducing spending in other sectors. There's no way they could shore up $2 trillion that way; the final bill would be much smaller in that case.


Are we talking about direct stimulus payments like the $1,200 checks people got? If I understand correctly, the idea behind that is to facilitate any spending at all since that generates income for businesses. In other words, any spending is good spending regardless of whether it's productive. Without spending, the economy grinds to a halt.

With that in mind, if they are giving out helicopter money, they should be skewing it towards the poor. Not just in the "we should be helping the poor" sense, but because lower income recipients are much more likely to actually spend the money in the consumer economy. Middle class and affluent people will just leave the cash in the bank, reduce their tax liability, or buy investment assets since they don't actually need the money. That doesn't really help the economy or tax revenues.

Here in India, a lot of poor people receive similar handouts, both from the central government and from the state government. And in 90% of the cases, they spend this amount in alcohol and gambling. Only a very few use it for essential activity. I hope the case is different in the United States. This is also one of the reasons why a lot of people in India are against the idea of handouts. It will increase the tax burden on the middle class, and at the same time it will have no impact on the long-term welfare of the poor people.

I don't think money is a way for the economy to grow again. Economic recession stems from pandemics and they affect the entire economy. Businesses and citizens are struggling to pay off their previous loans. People need jobs, businesses need markets to sell their products. Supply and demand have an organic relationship and it helps stabilize the economy.
First, we need to escape from the pandemic on a global level. This will take a lot of effort from the health sector.
Need to restructure debts of businesses and people. Create a source of income for people and encourage them to consume.
When too much money is printed, the dollar loses value, so a meticulous plan for economic recovery is needed. Otherwise, the risk of a dollar crash is higher than ever, and things could get worse.

I'm skeptical. You got a source to back that up?


The majority used the money for daily expenses like food and bills, and after that, housing and paying off debts. Unsurprisingly:


https://www.cnbc.com/2020/09/04/americans-spent-their-stimulus-checks-on-food-and-utilities.html


Stimulus payments aren't intended to impact long term welfare, aside from the broad goal of preventing a prolonged recession or depression. And remember, any stimulus money that is spent at businesses is effectively a subsidy to those businesses. That's the entire point: to get income to businesses.

I can't speak to what India did specifically, but in the US anyone making less than $100K got a stimulus payment. So not only did the middle class receive a handout as well, but business owners doubly benefited when consumers went to spend the money.