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The US economy could suffer catastrophic consequences if the new bailout is not approved


More than 100 US business leaders on August 3 sent letters to legislators of Congress to urge them to set aside disagreements and approve emergency aid packages. Small businesses are struggling by the Covid-19 pandemic.

Leaders of major US companies such as Walmart, Facebook, Alphabet (Google's parent company) and Starbucks have warned about the "catastrophic" impact on the US economy and job market, if the aid package Federal federation for businesses is not passed.

The US $ 2.2 billion Covid-19 pandemic Economic Assistance and Assistance Act (CARES) passed by the US Congress in late March 2020 provided some loans to help companies overcome the crisis. However, the Federal Unemployment Program, which is part of the CARES Act, with a weekly US $ 600 unemployment benefit, expired at the end of July.

The leaders of the companies mentioned that small businesses play a very important role in the strength of the US economy, but most of these businesses do not have enough cash to wait for the vaccine to prevent SARS-CoV virus. -2 was born and is facing the risk of "destroying" the financial system, thereby pushing the US economy into a recession longer than expected. Therefore, in this "hot fire" period, lawmakers need to overcome partisan interests to quickly adopt a new bailout package.

On the same day, the Federal Reserve also said that the world's largest economy, which was "battered" by the outbreak of the Covid-19 outbreak, needed to increase public spending to help households and businesses overcome the impact of this epidemic crisis.

The call came amid Congress and the White House resumed talks on a new government bailout package, including an extension of the unemployment package that expired last week.

Currently, Democrats do not agree with the proposal to reduce the unemployment allowance of 600 USD / person / week to 200 USD, arguing that this support level does not meet the consumption needs of the American people. After a $ 3,000-billion bailout package quickly passed by Congress in May, US lawmakers missed the July 31 deadline to extend unemployment relief, which is supposed to play an important role to the US economy.

On August 3, the US Treasury Department announced its intention to grant an additional US $ 1,000 billion loan from now until the end of September and an additional US $ 1,200 billion in the last three months of the year to prevent an outbreak. Meanwhile, at the Fed's latest policy meeting, the bank also pledged to do everything in its power to help the economy overcome the recession.

St. Louis Branch Fed President James Bullard said that the US economic recovery from the Covid-19 crisis could slow down in July 2020, after unexpected acceleration in May, 6.

According to Mr. Bullard, the recovery momentum of the world's largest economy from here will not seem to be going smoothly anymore. Besides, the over-emphasis on demand for vaccines can make consumers more likely to stay at home, thereby aggravating the gloomy business situation and causing serious damage to the economy. International.

Instead, Mr. Bullard encourages the use of more common masks and quick tests to help people feel more comfortable using aviation services and other economic and social activities.

 

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