Stimulus Packages Around the World: A Cure or A Band Aid?
The wave of the uncertainty of the exact time getting back to work and making money is slowly spreading virally through families withdrawn from their sedentary lives to a stay-at-home government-issue lockdown. Although the event of having a lot of free time has enlightened people with incredible and sometimes odd of-the-top creativity to show off in social media, the awful feeling of not making an income for the god-knows amount of time has maliciously festered in the minds of the jobless people living in this era. So, as part of public relief and efforts to keep the society from falling into a mental void, countries across the globe have planned Coronavirus stimulus packages released and distributed to the citizens. How generously different countries are doing this, or what were their mindsets deciding how much to help in-need families and workers? Let’s find out.
We’ll start with one of the latest countries to get hit by the novel Coronavirus pandemic and also on the latest ones to take preventive actions and social distancing measures. The number of unemployed citizens in the US has reached a milestone as 16.7 million job-stripped Americans rely on the government to provide them with funds. The stimulus package in the US includes a $2.2 trillion deposit to eligible Americans who can meet tax and financial requirements; this comes down to $1,200 financial aid to each person without a job. A lot of speculations have been flying around, especially in tweeter, where a viral tweet claimed that the total amount of US stimulus package falls short in comparison to countries like South Korea or Canada. The rundown of unemployment benefits of some hard-hit countries in direct heads up to America’s stimulus check isn’t viable, however, since it compares the amount given out by the government in these times to the general unemployment benefits handed out to not-working citizens in those countries.
Furthermore, the unemployment benefits vary from one state to another in the US, making it more difficult to confirm or deny the tweeter-based claims. The average number – which puts us on the safe side of the whole US Coronavirus stimulus package break-outs was announced $378 per week for jobless person pre-pandemic. After the CARES Act, the amount boosted up by $600 a week through the end of July, profoundly increasing the financial support in each state.
The third-biggest economy in the world, and one of its most-indebted ones, took the situation seriously front on and ordered an all-in state of emergency in hopes to fight the infectious virus and stop it on its tracks. Although a thorough and quick response to press the Japanese to put locks on their businesses and stay at home, things didn’t go in the direction the Japanese minister wanted them to go.
The crowdedness of the Capital, Tokyo, and six other significant prefectures in the country like Osaka and Fukuoka, holding roughly 45% of the total population, didn’t help the nation to fight off the pandemic without any casualties. However, the number of confirmed cases in these regions still trail by a considerable margin after some other international counterparts cities like New York, with only 1339 cases in Tokyo.
As compensation for millions of jobs lost or on hold, the Japanese government approved of a total stimulus package of 108 trillion yen, approximately $1 trillion US dollars and equal to 20% of the country’s annual GDP.
The Japanese government, in fear of already-recessed economy worsening, lingered on its decision to declare a state of emergency and force people into a lockdown, which brewed some controversies and negative criticism. We have to wait and see how the next Olympics host will fair after the crisis is over.
Although both geographically located in the same piece of land, the measures and authoritative approach towards the infamous outbreak of the COVID19 virus felt continents apart between the Canadian government and the US government.
Same as other global well-established economies, as an aftermath to the bitter order of social distancing, Canada too took an immense downturn in different sectors. Thousands of businesses have closed their doors, and people are staying home to stem the impact of the COVID-19, and while they have been successful, the action hasn’t bode favorably for the country’s oil and gas production quarter. The oil and gas sector contains 10% of Canada’s annual GDP and has witnessed better days. Today, its outcome has plummeted with the sharp cut-down of prices as a direct result of social distancing and fewer individuals gassed up about short trips to the office or just driving around for a change.
Unwilling to consider an early return of the country to its pre-Corona status – an unsanctioned move previously teased by Trump administration – Canada took immediate, decisive, and somewhat drastic actions to curb the virus’s speed. On March 18, 2020, the Prime Minister announced a full-blown relief program to help Canadian households stabilize and economy get back on its knee. According to “Canada.ca”:” On March 18, 2020, the government and its partners announced further measures to support businesses. These actions are part of Canada’s whole-of-government response to COVID-19, and the significant stimulus program developed to stabilize Canada’s economy, support businesses, and to protect Canadians.”
The Canadian relief stimulus package is set to add C$2,000 into peoples’ pockets affected by the outbreak in the next couple of months.
To not land on the path to the post-pandemic recession, The Bundestag (German parliament) made history by announcing an $815 billion stimulus package to fend the country against the ongoing havoc of the Coronavirus. It approved the aid outing to cushion the blow of the Coronavirus outbreak and assist in the revive of the country after the dust has settled.
Europe’s most massive economy has not yet taken extreme measures to contain the spread of the virus. It has only suspended the gathering of more than two people and imposed strict social distancing rules. German can also still go about their daily jobs and exercise outside if they keep at least 1.5-meter distance from others. Non-essential shops and services have been ordered to shut down, and restaurants and cafes can’t accept customers. They can only do take-outs or deliveries. Additionally, schools in Germany still remain closed until the Easter holidays on April 24. Germany’s Coronavirus stimulus package consists of hundreds of millions of budgets for economic stability, and it’s aimed at rescuing companies and families from further financial difficulties. Generally, private equity-financed companies and start-ups, both VC-financed and bootstrapped, can access the various protective commercial programs as amended or newly established by the German Federal Government as a response to the current pandemic. Since many young German companies and in particular start-ups may have difficulties meeting the applicable eligibility criteria, the German Federal Government reacted to this specific need by designing a unique support program for these companies.