With COVID -19 wave's erupting, the U.S. economy has become a victim of inflation, high unemployment rates, and low economic growth. However, as we come close to the end of the second year of COVID-19 there is a sense of optimism in the government. According to the Forbes article, the Central Bank has reported that job marketing is slowly improving. Due to this, they will now stop their emergency funds to the economy. A date has not been set for when the funds will stop. In August, fewer jobs were put up as the Delta variant was spreading. Current inflation rates are also at 5.3% which is the highest it has been in 13 years! Currently, the fed's have two goals for the economy:
1) Keep the U.S. inflation at 2%
2) Reach maximum employment - which means everyone who needs a job has one.
During the pandemic, the government supported the economy by slashing interest rates to historic lows and pumping billions of dollars into the financial system by buying government and corporate bonds. After the emergency funds will stop the interest rates will go back up.
With COVID-19 still being a sensitive issue will this help the economy start functioning on its own again or will this hurt the economy even more? If the government doesn't pull out now then is there a better time?
https://www.bbc.com/news/business-58659476
3 comments:
I believe that the government should stop their emergency funds, however, I believe that it should be a slow process. I mentioned this several times last blog period regarding some of the emergency funding such as stimulus checks. There is a large portion of individuals who are being paid more with the stimulus checks and unemployment than they were when they were working. This does not encourage people to go back to work. By removing some of these emergency funding, people should be encouraged to re-enter the workforce and apply for jobs. I see hiring signs at almost every store I pass. It's not that companies are not hiring, it's that people have no incentive to work.
The government cannot keep giving out emergency funds without making it detrimental for themselves so emergency funds should be stopped. This would encourage more people to go back into the workforce instead of living off of their stimulus checks. However, this should be done slowly to make sure people do not run out of money before they find jobs. There should also be assistance from the government in helping these people find jobs and also be able to work in safe environments so the government should put out mandates that increase safety against Covid.
Due to emergency funds that helped many people during the pandemic, many people decided to resign their job. Of course, help from the government supported many families, helped businesses, and saved markets. However, in my opinion it is the right decision to stop funding because the market is recovering. There is a big shortage of labor. Thus people should start working instead of doing nothing
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