Reference no: EM133700926
Assignment:
Discussion Case: Government's Response to the Coronavirus Pandemic in the United States and the European Union
In 2020, the spread of the coronavirus caused a global pandemic that in just one year claimed nearly 3 million lives and infected more than 120 million worldwide. The economy fallout was immediate and devastating. The World Bank calculated that the world economy shrank by 4.3 percent in 2020, a setback matched only by the Great Depression and the two World Wars.
Prior to the pandemic, unemployment in the United States was at a SO-year low, and inflation was below the Fed's target of 2.0 Page 161 percent. Yet, in 2020, the U.S. real GDP growth fell during the second quarter by an astounding 31.4 percent, a drop not seen in the United
States since the Great Depression of the 1930s. The country's unemployment rate spiked to 14.7 percent, the highest in the post- WWII era.
Similar economic impacts were seen in Europe. By the end of 2020, seasonally adjusted GDP decreased by 1.3 percent in the euro area and by 0.9 percent in the EU. These declines were the sharpest decreases since 1995. Unemployment in the euro area reached 8.1 percent, compared to 6.4 percent a year earlier. In the fourth quarter of 2020, household real consumption per capita decreased by 2.9 percent in the euro area.
The U.S. government came to the aid of many Americans and American businesses with the passage of numerous "COVID relief" stimulus packages. In March 2020. a $2 trillion stimulus package provided Americans with adjusted gross income up to $75,000 ($150,000 for married couples) with checks of $1,200 ($2,400 for married couples). The unemployed received an extra $600 per week for up to four months, in addition to their current state unemployment benefits.
Businesses also benefited from the March relief bill. The hospitality industry, particularly hard hit during the pandemic, received $100 billion in rescue funds. The airline industry, also devastated by the substantial drop in air travel, received $29 billion in grants and $29 billion in loans and loan guarantees, as well as a reprieve from paying multiple taxes. Health Care providers were eligible for $100 billion in grants to help fight the coronavirus and subsidize health care facilities for losses due to delays of elective surgeries and other procedures. Other businesses received a tax credit for keeping idle workers on their payrolls during the pandemic and a refund for half of what they spent on wages, up to $5,000 per worker. Nearly $24 billion was earmarked for farmers and ranchers to stabilize the farm sector. Financial support was also extended to state and local governments, schools, and investments in telemedicine.
The U.S. government also targeted Americans' health care. In 2020, the CARES Provider Relief Fund supported American families, workers, and the health care providers in the battle against the COVID-19 outbreak. The Department of Health and Human Services (HHS) distributed $178 billion to hospitals and health care providers on the front lines of the coronavirus response. The HHS and various state and local governmental agencies coordinated a massive testing, treatment information, and vaccine distribution program.
Government agencies also targeted support for mental illness during the pandemic for any American who sought this help.
Government supported research was essential in the rapid development of vaccines in response to the coronavirus. The government poured an additional $ 10.5 billion into vaccine companies since the pandemic began to accelerate the delivery of their products. By May 2021, the United States ranked third among countries in percentage of the population vaccinated: 43 percent (following only Israel, 62 percent, and the United Kingdom, 50 percent).
In response to the fight against the coronavirus, the European Commission pledeed €1.4 billion as part of the Coronavirus Global Response, launched by the World Health Organization in 2020, for coronavirus vaccine development. The EU also provided various social programs to encourage coronavirus testing and vaccinations. The EU's Health Security Committee adopted a common standardized set of data to be included in a COVID-19 test result certificates. Test results were commonly requested by EU members as part of their free movement within the BU to prevent further spread of the virus and its variants.
Four months later, Congress passed the Paycheck Protection Program (PPP), assisting small businesses across almost every sector of the economy. More than 90 industry sectors each had more than 10.000 firms approved for the PPP loans. About 264,000 companies in the restaurant industry received PPP money. Economists reported that the hotel industry was able to retain 980,890 jobs, while recipients in the computer system design sector said 589,532 jobs were protected. The U.S. unemployment rate remained quite high but had fallen to 11.1 percent.
In December 2020, Congress reached a final agreement on an additional $1.9 trillion worth of coronavirus relief. Stimulus Page 162 checks for $1,400 were sent to individuals making less than $75.000, and married couples could receive two checks if their combined income was below $150,000. Enhanced unemployment benefits totaling $300 a week were extended through September. Tens of billions of dollars facilitated the vaccine rollout, with $8.75 billion going to many levels of government agencies for the distribution. administration, and tracking of vaccinations. This legislation raised the $2,000 Child Tax Credit to $3,000, set the tax credit at $3,600 for parents of children under age 6, and increased the maximum tax credit to $6,600 from $2.800 per household.
Similarty, in the summer of 2020, EU leaders committed €1.8 trillion in an unprecedented effort to reverse the economic slump in their 27 member countries. The aid provided a massive fiscal injection for the bloc's hardest-hit countries, without increasing the soaring debt levels of the southern countries, including Spain, Italy, and Greece. The EU also adopted a program to provide up to €3 billion of macro-financial assistance to 10 EU partners (countries neighboring the EU but not formally members of the EU) to help them cope with the economic fallout of the COVID-19 pandemic. Financial assistance was provided in the form of loans with highly favorable terms.
Together with the support from the International Monetary Fund, the EU assistance program helped enhance macroeconomic stability and allowed resources to be allocated to protecting citizer.and mitigating the negative socioeconomic consequences of the coronavirus pandemic.
Economic reports released in April 2021 showed that the U.S. and EU recoveries were on different trajectories. According to Peter Goodman, "The lesson-along with vaccines, it pays to unleash enormous amounts of public money in the face of a livelihood destroying health crisis." Yet, it seems that the EU may not have done enough, compared to the United States. The Eurozone economy contracted by 0.6 percent in the first quarter of 2021, while the U.S. economy expanded by 1.6 percent over the same period, after more substantial expenditures aimed at stimulating growth.
- Trace the basic elements of the public policy process found in this case (e.g., inputs, goals, tools, and effects).
- In your view, was it more important for governments to respond to the pandemic with economic or social assistance policies? Substantiate your answer.
- Do you think the United States or the European Union used public policy better to respond to the pandemic? Why do you think so? Substantiate your answer.
Pls write each one paragraph
Important Note: Your answers must be substantiated with evidence. Your evidence may include sources from newspapers and other reputable sources.