In the aftermath of the global COVID-19 pandemic, economic activity around the world has suffered. This had a significant impact on financial institutions, loans and bad debts. Discussing financial advisor mortgage the plan will greatly help anyone with a current loan.
To fully understand how the pandemic affected credit, let’s look at the US government’s fiscal response. They have successfully implemented new policies to protect not only those affected by COVID-19, but also those suffering from food shortages, ongoing loans, and funding for public health programs such as vaccine development.
What was the US fiscal response in 2020?
When the COVID-19 crisis hit the United States, the government had to rethink its policies to accommodate this emergency health crisis. Here are the main policy responses to US government finance.
Payroll Protection and Health Care Improvement Act ($ 483 billion)
This law included the following provisions in terms of financial security for most Americans:
- $ 321 billion in additional forgivable loans and Small Business Administration guarantees to help retain workers in small businesses
- $ 62 billion for Small Business Administration in Loans and Grants to Support Small Businesses
- $ 75 billion for hospitals
- $ 25 billion to expand coronavirus testing
Coronavirus Relief, Relief and Economic Security Act or CARES Act ($ 2.3 Trillion)
This CARES Act, backed by a whopping US $ 2.3 billion budget, was designed to financially support the most vulnerable populations. It included the following provisions:
- $ 268 Billion in One-Time Personal Tax Credits
- $ 268 billion to boost unemployment benefits
- $ 25 billion to build a food safety net for the most vulnerable
- $ 510 billion in corporate bankruptcy prevention through loans, guarantees, and support for Federal Reserve Program 13 (3).
- $ 349 billion in forgivable loans and Small Business Administration guarantees to help small businesses that retain workers
- $ 100 billion for hospitals
- $ 150 billion in transfers to state and local governments
- $ 49.9 billion in international aid, including part of a new International Monetary Fund (IMF) borrowing arrangement
Coronavirus Preparedness and Response Supplemental Appropriation Act ($ 8.3 billion plus approximately $ 192 billion)
- Virus testing and patient relocation for Medicaid funding
- Vaccine development
- Development of therapy and diagnostics
- Support from the Center for Disease Control (CDC) and Prevention
- Paid sick leave up to 2 weeks and emergency leave up to 3 months for those infected with COVID-19? to pay
- Food aid
- State transfers to fund extended unemployment insurance
- Expanding Small Business Administration Loan Subsidies
- Suspension of fulfillment of obligations under the federal student loan for 60 days
- $ 1.25 billion in international aid
American Rescue Plan ($ 1,844 billion)
This is the most recent development signed by President Biden on March 11, 2021. It focuses on the following:
- Investing in a public health response
- Providing timely assistance to families, communities, businesses
- Extend the unemployment benefits program, including supplementary unemployment benefits
- Sending Direct Incentive Payments of $ 1,400 to Eligible Persons
- Providing direct assistance to state and local authorities
- Adding resources to your current vaccination program
- Increase funding for school opening
Overall, the budgetary response was overwhelming, accounting for a significant portion of the country’s GDP. COVID-19 has definitely impacted current loans and it will continue to affect currently issued loans. The economy is opening up, but the measures vary from state to state.
Although the economy contracted 31.4% in the second quarter of 2020, it has rebounded strongly since then, so you can also expect better mortgage plans and credit support. A good place to start is to talk to a financial advisor or loan officer.