Potential Impact of Not Having A Second Stimulus Package

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By Michael Ge

Source: Angela Lang/Cnet

Congress and the President have been at odds with each other over the passage of a second stimulus package.  Talks have stalled after the White House announced that there would be no second stimulus until after the election, but then suddenly reversed course.  

Democrats want a $2.2 trillion dollar stimulus package while Republicans want to spend a maximum of $500 billion dollars. Republicans fear increasing the deficit, even though Trump had already substantially increased the deficit before the pandemic.  Democrats led by Speaker Nancy Pelosi are opposed to the smaller package by Republicans.

While congress remains deadlocked on the issue, the economy has shown some signs of recovery, but it has not reached pre-COVID-19 levels. However, in the third quarter of 2020, the economy did start to show signs of a recovery and showed record growth.  But many businesses are still closing and many people have been laid off or furloughed.  Many large businesses, like Southwest, have announced job cuts that will lead to tens of thousands of workers losing their jobs before the holiday season.

Small businesses, which serve as the backbone of the American economy, are struggling to stay afloat.  Unemployment claims are still high.  If there is no stimulus, it is extremely likely that the economy and businesses will continue to stay below pre-COVID levels for the foreseeable future.  In order to help the economy, businesses, and workers, it is imperative that a second stimulus bill is passed immediately.   

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