The American government gave financial aid to millions of its citizens amid the coronavirus pandemic that resulted in the loss of jobs and closed businesses. The assistance provided the jobless with a source of stability, but it also begged the question of how long it would last.
The assistance issued $1,200 checks to most households, but by now, the amount is long gone, especially for those in desperate need. The potential extension of the aid looks to be improbable unless Congress decides otherwise.
Soon to end
July will see the end to the $600 additional unemployment benefit that supported tens of millions of jobless citizens in paying necessities, as reported by the New York Times.
On Thursday, the Labor Department revealed that several million more Americans filed for unemployment benefits in the past week alone.
Since the start of the coronavirus pandemic, more than 40 million Americans have filed for unemployment benefits and that 30 million of them have received their aid.
The financial aid has mitigated the concerns of citizens suffering amid the increasing bills and shortage of necessities, although it has not entirely prevented the issue.
"The CARES Act was massive, but it was a very short-term offset to what is likely to be a long-term problem," said the chief financial economist for Jefferies, Aneta Markowska. The economy will more likely need even more support, she added.
The Labor Department has revealed that the national unemployment rate has risen to 14.7% due to the coronavirus pandemic closing off businesses and causing employers to layoff their workers.
According to BBC, the increased number of positive coronavirus cases have resulted in Trump signing an $8.3 billion emergency bill that seeks to provide enough assistance to the millions of Americans devastated by the effects of the pandemic.
US President Donald Trump along with other Republicans has not admitted that there is a need to spend more in the fight against the coronavirus and the effects it has on the economy.
The president and his administration believe that the solution to the economic crisis is the reopening of businesses and easing restrictions to allow companies to get people to go back to work.
Pleas from economists across the nation, including that of Jerome H. Powell, the Federal Reserve chair have been shot down or will be severely limited.
Advantages of insurance
On Thursday, the House unanimously voted to allow businesses more time to utilize the borrowed money given by the Paycheck Protection Program (PPP). The program offered a chance for forgivable loans that small business can apply for.
Senior policy analyst at the National Employment Law Project, Michele Evermore said that she occasionally had emotional people calling her expressing their receipt of the payments, which helped them pay bills and buy necessities.
Research has found that unemployment insurance is one of the most practical parts of a safety net. It not only softens the impact of unemployment on families, but it also helps to lift the economy amid the crisis it is facing.
The program is "well-targeted" in economists' parlance, as it is distributed to those who need it and will use it fruitfully.