Economic Approach to Survive Covid-19 Pandemic

Just in late February of this year, Trump administration stated that it is planning to spend roughly 2.5 billion dollars in an effort to battle Covid-19. And then just over a 45 days later, the president signed off on a spending that is amounting to 1000x more than what is initially planned. How much if you asked – it is only at 2.35 trillion dollars. That amount though does not include the efforts exerted by the Federal Reserve, which are more difficult to measure but may likely past the 4 trillion dollars mark.

All that being said, the US government has spent over 6 trillion dollars to halt economic downturn brought by the outbreak. This move seems to help in calming stock market investors but might not suffice in keeping the economy up on its feet.

If you are going to combine the measures taken by the Fed and the congress and also, account how these two interacted, the national response of America towards Covid-19 represents more than ¼ of its economic output.

Bold Move to Save the Economy

While this makes it quite challenging to get hurtiglån på dagen, the government is doing the best that it could to promote and encourage individuals to push through with their small business ideas. Considering that everything the government studied to get a ballpark figure of GDP, pensions and military wages, record sales, high school sports participation, toll booth returns on local highways, sewage collection receipts, manufactured home shipments and so forth. There are approximately 2500 measurements of it and Covid-19 response may easily buy everything they are representing for more than 90 days.

There are actually three stages of congressional stimulus and they are enumerated in the following:

  1. There is 8.3 billion dollars in response to the Trump’s request of 2.5 billion dollars
  2. 192 billion dollars are intended for act extending the paid leave and lastly,
  3. Around 2.15 trillion dollars for Cares Act

After adjusting the congressional response for how big the US economy is, it has been noted that the big part of congressional stimulus was the 10th largest in the world by proportion.

Fiscal Response

In reality, Federal Reserve is doing everything that they could in propping up the economy than what the Congress is, but then again its contribution is quite difficult to measure. There have been a number of Fed interventions that haven’t stated limit and none of it is government spending in traditional sense.

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Microcredit Gives Opportunities For Start-up Businesses

Microcredits are classic loans, but with a very small loan amount of up to usually 1,000 euros. Micro, mini or small loans are used particularly in development aid and play a crucial role there. This type of loan is suitable for anyone who quickly needs a relatively small loan with a very short term. It is usually cheaper than an overdraft facility. In many developing and emerging countries around the world, microcredit is more than just a small loan. It can effectively help secure people’s livelihoods and give them the opportunity to start their own business.

In order to distinguish the original microcredit used in developing countries from “our” microcredit used in the industrialized countries, so-called “payday loans” are used in the Anglo-Saxon language area. It describes the small 30-day loan that can be applied for online via FinTech comparison portals or at the house bank. The actual microcredit, on the other hand, is an effective help for self-help for many people.

Who can get microcredit?

People with only a small or irregular income are reluctant to see banks as credit customers. If you want to open a business or want to start your own business as a trader, you urgently need money from the bank. However, the bank does not issue a loan because it lacks the necessary collateral.

Microcredits are created for those people who the bank refuses to give them a normal loan. The microcredit gives those who are refused by traditional banks, They are usually average people who want the chance to open a business and become self-employed with a service or a craft.

Small loans for women. Most women in Third World countries want to be independent and earn their own money to give their children a better future. In this way, poverty is combated or reduced very effectively worldwide.

Who grants small loans?

It’s not just banks like the World Bank that give small loans to people in developing countries. Private banks and companies also lend money to people who otherwise would not get a loan on fair terms. In the meantime, there are small village banks in many Third World countries that issue microcredit. See also https://moneylendingclub.com for small loans for startups.

In addition to foundations, governmental aid organizations are now appearing as donors for microcredit. These lenders alone have more than $ 70 billion in lending in circulation. Around 100 million people around the world benefit from these loans. From Germany, for example, Deutsche Bank is involved with a “Research Program” as a lender and helps people to make a living themselves.

How does microcredit work?

Microcredit basically works like any other classic loan. The borrower submits an application to his bank and explains his wish for a loan. If the reasoning is logical and plausible, the bank grants the loan and the customer pays the sum plus interest back to the bank after a previously agreed term.

However, microcredit for the third world is different from a conventional loan. Customers do not have to bring any collateral, because the borrowers of microcredits are the poorest of the poor. These people have no reserves and no collateral. According to the World Bank, most customers who apply for microcredit are so poor that they don’t earn a single dollar a day when they are employed.

The poverty and dependency of these people promise the banks and private donors a steady growth of their business. Critics call this a business with poverty. This accusation cannot be dismissed entirely from the hand. People can help themselves with microcredit, but at the same time, they are living in a certain dependency again, in this case on the lender. Nevertheless, microcredit is often the only solution to live a self-determined life and make money. However, the high repayment rate and the successes that microcredit has had so far speak more for them.

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Trump Still Aims to Control the CARES Fund

Trump recently removed the Inspector General who was supposed to head the committee tasked to oversee the disbursements of the CARES Act Fund. The creation of an oversight committee was one of the conditions fought hard for by both Democratic and Republican Senators in approving the release of the $2.2 trillion government funds under the guidelines of the Coronavirus Aid, Relief and Economic Security Act or The CARES Act.

 

Yet Trump who had stated beforehand that he intends to be the sole “oversight” in controlling and monitoring the release of the funds, has taken action to circumvent that condition. In a move that is typical of this incumbent U.S. president who has no regard for ethics, Trump removed Glenn Fine as acting Department of Defense Inspector General.

IG Fine gave Congress no reason to worry in leading the Pandemic Response Accountability Committee that was set up in connection with the approval of the CARES law. After all, he has served as Inspector General for the Department of Justice for 11 years, whilst keeping an excellent nonpartisan record in carrying out his duties.

Trump did not fire Glen HInes but merely sent him back to his former position of principal Deputy Inspector General for the Dept. Of Defense (DoD) before he assumed the position of Acting IG for the said department. Had Trump designated another Inspector General to replace Fine as DoD head, Trump’s action might not be a cause for concern.

Instead, Trump designated Jason Abend, a Trump-appointed senior policy adviser at U.S. Customs and Border Protection (CBP), as the new Inspector General of DoD. The move also effectively placed Abend as head of the CARES oversight committee.

How Jason Abend’s Qualifications Compare to Glen Fine

Glen Fine has a long record of serving as Inspector General for the Department of Justice, a position he held during the presidency of Bill Clinton. In 2015, Fines accepted a post to become the Principal Deputy Inspector General of the DoD. In January 2016 and under the Obama Administration, Fine became the acting inspector general for the same department.

Apparently, what Trump did was to demote instead of promote Fine as a full-fledged Inspector General at the Department of Defense.

In contrast, before Jason Abend was appointed by Trump as Senior Policy Advisor of the U.S. CBP, he worked as a special agent of the Inspector General offices at the Department of Housing and Urban Development and at the Federal HOusing Finance Agency.

A special agent is basically a federal law enforcement officer tasked to conduct investigations related to minor criminal or non-criminal cases. A special agent has no authority to investigate major criminal cases, Obviously, Abend’s credentials in becoming the Inspector General of the Department of Defense is not as well-founded as that of Glen Fine’s.

 

After announcing Abend as the new IG for DoD, Trump had given instructions for the CARES Act oversight committee, to first pass on to the White House any information that it intends to forward to Congress.

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