Between April and June, the US economy fell at a 32.9 percent annual rate as the nation struggled with lockdowns and budget cuts during the pandemic. The stay-at-home initiatives have almost taken certain businesses to a grinding halt, such as hotels, restaurants, and retail shops. However, the economic slowdown is expected by economists to be sharp but brief. This expectation depends on the decisions that government officials take during this important stage such as below.
Focus on growth of economy
It is no time to go by the same rules anymore in 2021 instead economic growth should be prioritized even if it is not matching with previous standards. Simply put, to maintain a stable debt-to-GDP ratio, this would mean that the government should go gentle on raising taxes or balancing the budget rapidly.
Generating more income opportunities
There are a huge chunk of people who lost their jobs and livelihood in US during the pandemic. Government needs to concentrate on public projects, in particular those aimed at improving R&D spending and economic growth. It can also think up of the ways that unemployed workers can open their shops during some specific hours in monitored environment. That would allow some amount of income to run in their homes. Reducing the unemployment plays a very big part in lifting up the economy.
Encouraging work from home
As the virus has not been completely tackled with, it is still quite hard to put the economy back on track. However, the scheme of working from home can actually offer a great foundation for recovery while the pandemic is still going on. Work from home has been fruitful for many businesses as their expenditure has been cut down and this way employment stays at its place. In addition, the new technologies such as Zoom etc are helping in making the work more efficient and easy.
Providing loan to business
Government needs to offer loans, tax rebates and grants to small businesses in order for them to survive this pandemic and help in boosting the economic growth in US. However, there is still a limit to what government can do to aid the business as the pandemic has crushed the budgets and states cannot afford to go in budget deficit. The US federal government can actually help in this matter as it has a chunk of money to invest back in small businesses rather than using anywhere else. Combined, all the businesses can be a huge boost in bouncing economy back.
In our battle against COVID-19, we are entering a critical era. Although the obstacles ahead are not to be denied, we are still better trained and more experienced than that in March. US government should use this to their benefit and build an equally thorough and nimble economic solution. There has been a severe fluctuation in the economy because of this pandemic but it is safe to say ‘this shall too pass.’