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JPMorgan chief US economist expects an around $1 trillion stimulus package early next year. However, Goldman Sachs analysts expect a $1 trillion stimulus package before the end of the year.
Prior to the election, incumbent President Donald Trump had promised another stimulus package immediately after the election process, based on the assumption he would easily win the contest. However, with the shot backfired he is now left to fight with the President-elect Joe Biden and his team to settle for the next stimulus package.
Disagreements between the White House and the House of Representatives is evident, which may delay the next stimulus package until perhaps after Biden’s inauguration in January.
This leaves the unemployed American at risk of eviction as the number of coronavirus cases rise by the day. According to figures provided by worldometers.info, the United States is leading the list of countries with coronavirus cases at 11,367,214. As of the time of writing, there are 251,901 fatalities reported in the country with 6,937,236 already recovered. Notably, based on the current scenario projections indicate that the United States will report 438,941 COVID-19 deaths by March 1, 2021. With the country ramping up its testing capabilities, the number is expected to spike in the coming months.
Hereby putting more jobs and businesses at risk of closure thus worsening the crisis. Although the number of reported jobless claims had dropped significantly weeks to the election, without a stimulus package and the coronavirus worsening by the week things might take a different turn.
Second Stimulus Package
Currently, House Speaker Nancy Pelosi is pushing for a second package of $2.2 trillion. However, there seem to be notable disagreements with Treasury Secretary Steven Mnuchin. Therefore leaving the ball to Senate Majority Leader Mitch McConnell to revive talks with Pelosi.
According to McConnell, he is up for a smaller package of $500 billion against the one proposed by Democrats of $2.2 trillion. Apparently, McConnell’s proposal excludes the $1200 individual payment. Meanwhile, Biden, Pelosi and Senate Minority leader Chuck Schumer on Thursday agreed on a second package before January’s inauguration.
According to the joint agreement, they want a stimulus package “that provides resources to fight the Covid-19 pandemic, relief for working families and small businesses, support for state and local governments trying to keep frontline workers on the payroll, expanded unemployment insurance, and affordable health care for millions of families.”
With the current heated-up political situation in the United States, different analysts have varying opinions on the next stimulus package. JPMorgan Chase chief US economist Michael Feroli expects an around $1 trillion stimulus package early next year. However, Goldman Sachs analysts expect a $1 trillion stimulus package before the end of the year.
If the second stimulus package is not passed before the end of this year, all eyes will be on Joe Biden and his team. How he handles the unemployment crisis that is almost similar to what the Obama government inherited back in 2008.