U.S. President trump has signed an executive order to provide additional economic relief to millions of Americans without the approval of Congress. However, economists point out that the move will do little to boost the U.S. economy.
according to reports, trump signed an executive order requiring the U.S. Treasury Department to temporarily suspend payroll taxes on employees earning less than $100000 a year from September 1 to December 31; meanwhile, the US federal government will continue to provide unemployment benefits of $400 (originally $600) per week for the unemployed; in addition, it will extend the maturity of federal student loan repayment Time, etc.
However, economists poured cold water on the relief plan that they would insist on even if they broke with Congress. Mark Zandi, chief economist at Moody’s Analytics, a financial analyst, points out that it doesn’t help economic growth, and even if the trump administration can handle legal issues and implement the plan, these efforts may not have much effect.
Zandi calculated that the plan would provide a total of more than $400 billion in relief, but Michael feroli, an economist at J.P. Morgan, revealed in an email that the stimulus to the economy would not exceed $100 billion.
according to Lydia boussour, a senior American economist at the Oxford Institute of economic research, the relief will only account for 0.2% of US GDP, which is “insignificant.” In contrast, the Republican led Senate has proposed a $1 trillion rescue plan, while the leading house of Representatives has proposed more than $3 trillion.
the plan may not cover all the people who depend on aid. For example, unemployment benefits of $400 a week only apply to people who receive at least $100 in state unemployment benefits, with some low-income workers excluded. Mr. Ferrari estimates that the $44 billion in unemployment benefits, or provided by the U.S. disaster relief fund, will last only five to six weeks. The plan also requires States to pay 25% of their grants, which will put more pressure on state governments.
in Zandi’s view, the most likely measure to be implemented in the relief plan will be to extend the repayment time of student loans. The program was due to expire on September 30, and the relief plan will be extended to the end of this year. Zandi said the measure would save lenders $15 billion to $20 billion. “It’s important for students, but it really doesn’t make any sense for the macro economy in crisis.” (Wei Xuewei)