The CARES Act or the Coronavirus Aid, Relief and Economic Security Act was the immediate response of the American Government in March 2020 to stimulate the nation’s economy that was in tatters due to the scourge of the Covid19 pandemic. While complying with various health advisories of the US public health authorities to combat the deadly novel coronavirus that prevented people from venturing outdoors and prohibited mixing and crowding, and enforced home quarantine for one and all, all kinds of business activities came to a grinding halt overnight.
According to William D King, the immediate impact of the coronavirus pandemic devastated the economy as millions lost their jobs; the majority of the small and medium businesses went bust, and people remained confined to their homes indefinitely. The public health advisories about maintaining personal and public hygiene like washing hands frequently with soap, wearing a mask during physical interaction with other people, and maintaining physical distancing of at least 2 meters was highly detrimental for leading a regular life. Soon the US government promulgated the CARES Act to provide an unprecedented fiscal stimulus to $2 trillion to blunt the economic downturn that had set in due to the onset of the coronavirus pandemic.
The Enormity Of The CARES Act As Perceived By William D King
The second stimulus of the coronavirus rescue package or the Consolidated Appropriations Act (CAA) of December 2020 and the $1.9 trillion offered in the American Rescue Plan Act (ARPA). The CARES Act aimed at extending comprehensive financial support to all sections of people, including small and large businesses, individuals, families, industries, independent contractors, gig workers, and hospitals. The package of $2 trillion is the largest rescue package in the nation’s history, surpassing the earlier stimulus packages like the $831 billion offered in the Recovery Act 2009.
Saving Households And Businesses Remained A Priority
A close look at the manner of allocation of the government largesse reveals that the main thrust was on protecting households and businesses because 76% of the $2.3 trillion funds were allocated to these areas only. Small businesses received 26% of the funds, followed by businesses that received 23% and households received 27%. The other areas covered by the fiscal stimulus were Health providers and States and Municipalities. Both received 8% of the corpus, followed by 3.3% allocated to the Airline Industry and 2.9% for others. The government had correctly identified the main support areas that could help to accelerate the economic recovery through higher spending. However, there was little scope to start the economic activities anytime soon.
Supporting The Unemployed
Since the coronavirus pandemic dealt a massive blow to businesses of all sizes and types, it caused wide scale unemployment as people either lost their jobs or were furloughed. The stimulus package expanded the scope of the unemployment benefits and included furloughed workers, freelancers, and gig workers. In the beginning, the benefits were available for four months @ $600 per week for each individual who qualified for it.
Similarly, families received direct payments amounting to $1200 per adult and $500 per child that amounted to $75,000 of the total stimulus. The disbursements to businesses and other sectors were in the form of loans and grants.
