In the months that COVID-19 has rampaged across America, the economy has taken a massive beating.
People are afraid to leave their houses and reluctant to return to their favorite restaurants, bars and stores. The CARES Act, Congress’s initial relief fund passed March 27, provided one-time stimulus checks to Americans and federal aid to many small businesses.
As the virus continues to plague the nation, the economy struggles to recover as well. Gross domestic product (GDP) decreased at an annual rate of 32.9% in the second quarter. Citizens’ stimulus checks of $1,200 have long since run out, and Congress is unable to agree on the next relief package.
There’s an abundance of disagreement on how the government should take back our economy, and the answer may be in Democratic presidential nominee Joe Biden’s emergency action plan.
Biden claims that his short-term relief plan will carry Americans through these unprecedented economic and public health crises. It’s founded upon and will adhere to one of the candidate’s most popular slogans: build back better.
The Democratic nominee’s plan has three major steps: eliminate the coronavirus, expedite federal economic aid and form the next relief package with Congress.
Beating the virus
The first step to taking back the economy must be to stifle the pandemic — it’s become clear that the economy can’t thrive until day-to-day life is safe and stable again. Biden plans to expand contact tracing and boost the production of medical supplies such as ventilators and personal protective equipment (PPE).
How would this be done?
President Trump has invoked the Defense Production Act, which allows a president to issue executive orders to private companies who must comply with and prioritize requests from the government.
Biden would respond similarly, ordering private companies to amp up the production of masks, ventilators and other medical supplies, which would be supplied primarily to healthcare and other frontline workers.
The difference in Trump and Biden’s handling of the coronavirus lies in their desire to reopen the economy.
Trump pushed to reopen the economy in early May. The virus wasn’t anywhere close to being gone, but he insisted on the complete reopening of U.S. businesses and industries. After the resurgence of cases and deaths this summer, Trump still advocates for schools to open — an action that would risk lives while prolonging the pandemic.
Biden stresses the need to increase testing capacity, contact tracing and the production of medical supplies before reopening the economy. When Trump attempted to do so in May, the country saw an uptick in cases. To safely reopen the economy, Biden advocates, the U.S. must first have control over the pandemic.
Providing federal economic aid
The second step of Biden’s emergency plan for the economy would expedite federal financial aid to companies that commit to keeping workers employed.
This would allow employees to receive a paycheck and work during the pandemic if possible. The action would also create a drop in the unemployment rate, stabilizing the working class and the economy.
For those who are unemployed, or whose work isn’t possible during the pandemic, Biden said he would do everything possible to quickly pass bills that would boost unemployment benefits. Some may view expanded unemployment benefits as disincentivizing people to work. In many cases, the $600-per-week benefits are more money than the low-paying jobs people have lost.
However, studies find that boosting unemployment doesn’t discourage people from finding jobs. Rather, they’re able to stimulate the economy by spending money on necessary goods and services — supporting others’ jobs in the meantime.
As far as small businesses go, Biden said he’d work to pass a relief bill to help those companies.
The current bill on the table allocates $377 billion to aid small businesses. If a bill didn’t pass quickly through Congress, he’d enact the Defense Production Act to ensure that banks provide loans to small businesses. These loans would help small businesses to make payroll and meet other necessary costs in order to survive.
Building the next relief package
While the first deal that passed through Congress provided a one-time check of $1,200 to every eligible adult, it wasn’t enough. Biden said he wants to pass another, larger relief bill that includes more economic help for those who need it.
The bill would provide additional checks to citizens in need, forgive student loans, increase social security, provide emergency paid sick leave and ensure that all COVID-19 testing, treatments and, potentially, vaccines would be free for every citizen. In addition to these steps, Biden would also provide necessary fiscal relief to states and communities that need it.
How would we pay for it?
It’s evident that to achieve Biden’s ambitious plans to save the economy, the U.S. would need to spend hundreds of billions of dollars. While Biden’s plans could greatly improve the economy, there are risks.
To pull off all he’d aim to do, taxes would inevitably need to be increased.
However, Biden’s tax plan doesn’t raise taxes for most people with income under $400,000. In fact, he’d repeal the Republican-led Tax Cuts and Jobs Act (TJCA) of 2017. This would restore the top marginal income tax rate on incomes over $400,000 to 39.6% from the current 37%. Biden plans to raise the corporate income tax from 21% to 28% and impose a minimum book tax on corporations with income over $100 million.
These figures may seem like a boatload of money, and they are.
However, Biden said he would strictly oversee the use of taxpayer dollars. Larger companies that seek federal assistance would need to use the money to pay their workers, rather than letting the public’s money go to the pockets of CEOs. By using the Defense Production Act, Biden could ensure federal aid would go toward necessary business operations such as payroll.
Biden’s emergency action plan would require raising taxes, harnessing the power of the presidency and strict control of government money. Enacting it would boost the economy while saving countless American lives.
There’s plenty at risk in Biden’s plan, but the potential rewards may be too great to pass by.
Charlotte Matherly is a junior media arts & design major. Contact Charlotte at email@example.com.