Since the global COVID-19 pandemic, economic activity all over the world has been affected. This had a significant impact on financial institutions, loans, and distressed debts. Discussing a financial advisor mortgage plan will greatly help anyone with an ongoing loan.
In order to fully understand how loans were impacted because of the pandemic, let us take a look at the fiscal response of the US government. They successfully implemented new policies to safeguard not only those affected by COVID-19 but also those suffering from food shortages, ongoing loans, and to fund public health programs such as vaccine development.
What Was The Fiscal Response of the United States During 2020?
When the COVID-19 crisis hit the United States, the government had to revise policy responses to cater to this emergency health crisis. Here are the key policy responses in terms of the US government’s finances.
Paycheck Protection Program and Health Care Enhancement Act ($483 billion)
This legislation included the following provisions in terms of financial security for most Americans:
- $321 billion for additional forgivable Small Business Administration loans and guarantees to help retain workers in small businesses
- $62 billion for the Small Business Administration to provide loans and grants to assist small businesses
- $75 billion for hospitals
- $25 billion to expand coronavirus testing
Coronavirus Aid, Relief and Economy Security Act or the “CARES” Act ($2.3 trillion)
This CARES Act, backed by a whopping budget of 2.3 billion US dollars, was catered towards financially supporting the more vulnerable populations. It included the following provisions:
- $268 billion for one-time tax rebates to individuals
- $268 billion to expand the unemployment benefits
- $25 billion to provide a food safety net for the most vulnerable
- $510 billion to prevent corporate bankruptcy from happening, through providing loans, guarantees, and backstopping the Federal Reserve 13(3) program
- $349 billion in forgivable Small Business Administration loans and guarantees to help small businesses that retain workers
- $100 billion for hospitals
- $150 billion in transfers to state and local governments
- $49.9 billion for international assistance, including a portion for the International Monetary Fund’s (IMF) New Arrangement to Borrow
Coronavirus Preparedness and Response Supplemental Appropriations Act ($8.3 billion plus an estimated $192 billion)
- Virus testing and patient transfers to states for Medicaid funding
- Vaccine development
- Development of therapeutics and diagnostics
- Support for the Center for Disease Control (CDC) and Prevention response
- Paid sick leave for up to 2 weeks and emergency leave up to 3 months for those infected with COVID-19 at ? pay
- Food assistance
- Transfers to states to fund expanded unemployment insurance
- Expansion of Small Business Administration loan subsidies
- Suspension of federal student loan obligations for 60 days
- $1.25 billion for international assistance
American Rescue Plan ($1,844 billion)
This is the most recent development signed by President Biden last March 11, 2021. It mostly focuses on the following:
- Investing in public health response
- Providing time-bound assistance to families, communities, businesses
- Extend unemployment benefits program, including supplemental unemployment benefits
- Sending direct stimulus payments of $1,400 to eligible individuals
- Providing direct aid to state and local government
- Adding resources to the ongoing vaccination program
- Increase funding for school reopening
Overall, the fiscal response has been overwhelming, making up a good portion of the country’s GDP. COVID-19 has definitely made an impact on current loans and it will continue to impact loans being made at present. The economy is “reopening” but measures vary among the states.
While the economy contracted 31.4% in the second quarter of 2020, it has rebounded strongly since then so you can likewise expect better mortgage plans and loan support. A good place to start is by discussing with a financial advisor or loan officer.