The short-term outlook for the economy is grim. Some critical economic issues will only worsen if the Government does not intervene immediately. At the end of 2021, job growth has slowed and will be negative. Businesses have largely resisted recruiting due to concerns about uncontrolled pandemic progress. By 2022, as the number of people living in poverty has climbed to over 8 million, increased poverty and wealth imbalance are projected. Hundreds of small businesses have already closed their doors permanently, and many more are on the verge of doing so.
State and municipal governments are trying to keep up with increased demand for their services, despite declining revenues. People around the country are experiencing these issues, and they’re becoming worse. Only the Federal Government has the financial resources to ensure a faster and more effective recovery than that which followed the Great Recession, which left the American working class in ruins. Any federal government intervention must address three main objectives:
• The spread of the disease needs the establishment of public health infrastructure.
• Millions of Americans are risking starvation, eviction, or foreclosure due to a lack of access to healthcare and other necessities.
• To ensure that economic and employment growth resumes quickly, any government involvement must make major economic investments.
Here are some tips to improve the economy in the US
1. Changing the tax system
With lower tax rates and fewer exemptions, the system should be restructured to encourage people to enter the workforce, reduce income polarization, and support low- to middle-income families. A greater federal gas tax, a carbon tax, and a broader federal consumption tax can all be used to raise more money.
2. Improvements to the system
Growth and job creation have been held back because of a lack of investment in infrastructure in the private sector. An increase in public spending on maintenance, repairs, and new infrastructure projects would be justified within the constraints of deficit and debt reduction.
3. Assisting low and middle income families
To increase labor supply and human capital, it is necessary to improve educational opportunities and outcomes for low and middle income families and introduce paid family leave. The Earned Income Tax Credit, raising the federal minimum wage, and changing the architecture of social assistance programs are all ways to boost work incentives and protect the most disadvantaged.
4. Keeping the finance industry safe
Since the global financial crisis, significant progress has been achieved in tightening the regulatory framework for financial institutions. Smaller banks face a heavy compliance burden, which could be eased if the system were tweaked. However, the current regulation, oversight, and resolution approach should be maintained.
5. Simplifying Government rules
This, in conjunction with the harmonization of rules between states, has the potential to enhance job creation and growth. Care should be made to minimize negative consequences for the environment, workplace safety, or lower-income people’s safeguards due to such changes.
6. Expanding access to healthcare
Healthcare policies should try to preserve the gains in coverage made since the financial crisis, particularly for the poorest members of society. This will benefit productivity, well-being, and labor force participation. Simultaneously, the system must contain healthcare costs.
7. Government must take action quickly
Many people and businesses have spent their resources, and many others are edging toward bankruptcy, eviction, and foreclosure at this point. A deeper and longer downturn becomes a self-fulfilling prophecy if action isn’t taken soon.
8. You must think big to re-ignite growth
After a year-long economic slowdown, there is much work to be done. There is a lot of money to go around. As much as $4.5 trillion may be needed to restore the economy’s full capacity. Current proposals call for a lower sum. Even if the American Rescue Plan is fully implemented, it is likely to be simply a very significant first step toward long-term recovery.
9. Public health must be a major component of any economic plan.
This includes funding for the production and distribution of the vaccine, developing health care capacity in marginalized regions, and paid family and sick leave so that people no longer have to choose between their health and financial stability. It is essential to recover the economy to protect the public’s health.
Pro-growth spending must be included in any future “infrastructure and jobs” package. Economic slowdowns can endure for a long time because many businesses and consumers are financially fragile. There should be considerable, broad, and comprehensive investments in infrastructure that improve national competitiveness, enhance household income and reduce greenhouse gas emissions in a long-term recovery strategy. Transportation, water, renewable energy, education, rural broadband, and affordable housing should all be included in the ultimate bundle of services.
It is possible to lower household transportation expenses, improve access to work and education and remedy past discriminatory policies and projects that disproportionately affected low-income and minority populations by properly investing in infrastructure. In addition, government monies should be used to help areas experiencing long-term economic suffering. To attain prosperity for everybody, it is necessary to make investments inequitable infrastructure. There should also be an emphasis on advancing the care economy and enhancing educational opportunities as part of any infrastructure package. These investments will show a return at some point in the not too distant future.
The way these aims are achieved will provide three key outcomes. With the current slump turned around and the mounting financial challenges that individuals encounter daily relieved, economic disparities will be minimized. This will lead to a stronger and favorable expansion of the economy and the labor market.
Suppose Government does not move quickly with a substantial assistance package. In that case, the recovery from this calamity will take years, and millions of unemployed Americans may have to wait years for a new job.