Corona virus and massive debt ... America's double nightmare

Many experts believe that the US federal government can play an important role in responding to emergency situations in the country, such as the Corona Virus pandemic, but that this intervention must be accurate and short-term and not all be dumped in debt.

Writer Romina Pucha says - in a report published by the American "National Interest" - that Congress and the Trump administration need to focus their efforts on responding directly to the public health crisis that erupted in the American lands, provided that this response is quick, targeted and transparent, and avoids exacerbating the public debt crisis that Its features began to take shape.

The author warns that this role will not be easy, as Congress and President Trump were quick to issue urgent tax measures, such as allowing additional federal funding to support states in their handling of this health crisis, and to keep employees linked to their operators, while easing the economic burden on Both parties, provide temporary tax assistance to companies and individuals affected by the economic turmoil.

The writer believes that American lawmakers must move amid this crisis with full determination and wisdom, since the tax situation in the United States seemed dangerous even before the arrival of the Corona virus, and if Congress does not intervene to fix the causes of this crisis, the economic downturn and the measures taken to mitigate the damage of the Corona virus will They increase the likelihood of a public debt crisis.

The size of the national debt in the United States exceeds the size of the national economy, reaching 23.5 trillion dollars, and the expectations of the American public budget that was issued before the outbreak of the Corona virus, have warned that the annual deficit will exceed one trillion dollars, which means that the volume of debt will rise at a pace Faster than the economic growth pattern.

Health crisis
Today, Americans find themselves in the midst of a public health crisis, as rulers of various US states took unprecedented measures to reduce virus infection, which included closing the doors of many companies and institutions that are classified as non-essential, which means an acute wave of layoffs and bankruptcy of companies.

Until now, the intervention of the federal government appears firm and logical, as it focuses on taking temporary and accurate measures that directly address the health crisis and its serious economic consequences.

Where Congress decided to allocate large sums to respond to the needs of the health sector, and provide financial support to small companies, after which the President announced a national emergency linked to the Corona virus, which would enable him to provide $ 50 billion in the form of federal support to states, territories and local councils.

Congress has also passed other measures to benefit American families, including tax exemptions for those taking a paid vacation, as well as providing additional funds for welfare programs.

The writer says that a third package of measures that US lawmakers may take in this direction could increase the US budget deficit by two trillion dollars.

It is noteworthy that the US Senate voted on the final version of the economic aid package worth two trillion dollars (two thousand billion dollars).

In the past, many financial experts had warned legislators against the need to deepen the fiscal deficit in the budget and take wrong actions in periods of stability, because this represents an irresponsible behavior that makes the government unable in the future to deal with unexpected crises, and increases the risk of a debt crisis A year in the country, which is exactly what the United States faces today.

The author emphasized that Congress and the Trump administration, while continuing to deal with the threat of the Corona Virus on US soil, must strike a balance between the imperative of dealing with this emergency, taking fiscal responsibility, and protecting the economy.