On Thursday evening, President-elect Joe Biden announced his plan to bring aid to American citizens and businesses that have been hardest hit by the coronavirus pandemic.
His sweeping $1.9 trillion COVID-19 economic rescue package includes enhanced unemployment benefits, bigger stimulus checks, more assistance for small businesses — especially minority- and women-owned companies — as well as aid for states and schools, an increase in the minimum wage, plus much more.
Leaders from the retail industry welcomed the president-elect’s proposal and the speed with which his team plans to take action to combat America’s dual health and economic crises.
“The stimulus plan released today by President-elect Biden is expansive in scope, but it serves as an encouraging signal that the new administration intends swift action to support businesses and consumers,” Matthew Shay, president and CEO of the National Retail Federation said in a statement on Thursday night. “Jobs have been lost, businesses have been closed and our economy has struggled.”
Biden announcement comes at precarious time for the U.S. economy.
When the new year kicked off, Wall Street’s major indices spiked, as investors showed renewed optimism surrounding the rollout of multiple COVID-19 vaccines and the arrival of new — and perhaps more-predictable — leadership in Washington, D.C.
Then came the events of Jan. 6, when an angry mob of pro-Trump supporters stormed the U.S. Capitol Building, in hopes of overturning his defeat in the 2020 presidential election. The riots led to five deaths and prompted the House of Representatives to impeach President Donald Trump for a second time. A date for his trial before the U.S. Senate has not yet been announced.
Law enforcement officials have warned there remains a threat of possible “armed protests” in the nation’s capitol and at statehouses across the country leading up to Biden’s inauguration on Jan. 20, particularly if Congress votes to remove Trump from office.
Beyond the physical danger from such actions, experts say the violent unrest could have dire effects on the already-tenuous U.S. economy.
Amanda Weinstein, an associate economics professor at the University of Akron in Ohio, pointed out that much of America’s consumer spending hinges on women, who make the majority of buying decisions for households.
“Women are more concerned about and more affected by high violent crime rates. The violent events that occurred in our nation’s capitol do not bode well for instilling confidence in especially women consumers,” she explained. “Biden won the majority of women’s votes in 2020, and women may be confident in the coming Biden administration. [But they also could be] especially wary of what an exiting Trump administration means for our nation.”
Brian Marks, senior lecturer with the University of New Haven’s Pompeo College of Business, cautioned that America has a fragile economy that could be hindered by the current uncertainty, as well as the impeachment proceedings in Washington, which may delay Congress from taking action on economic relief and stimulus.
Though he described the impeachment as a necessary action, Marks said, “It is clear an impeachment, if they proceed following that path, will be somewhat of a distraction [for lawmakers].”
However, he added, it is possible that the Senate can proceed on both paths, carrying out the business of legislation while also conducting Trump’s impeachment trial.
Nevertheless, Marks predicted that the economy will continue to stagnate in the near-term, even with the proposed COVID relief packages. “I think we’re going to see some continued weakness as people are using the relief packages to cover some preexisting debt,” he said. “And the subsequent relief will also be used to deal with that.”
As many economic experts have emphasized, an economic recovery cannot truly take shape until the U.S. is able to escape the threat of the coronavirus — and that is still dangerously high. COVID-19 case numbers continue to skyrocket across the nation. As of Jan. 14, more than 23.3 million Americans have been infected, with 388,785 recorded deaths.
Weinstein explained, “Consumer confidence is key to increasing consumer spending. Consumers need to feel confident they can maintain their health and safety when they go out and spend their money.”
For now, the path out of the pandemic hinges the successful distribution of vaccines, and that process has been frustratingly slow in the U.S.
“Widespread vaccination rates, not just the vaccine rollout, will instill consumer confidence,” said Weinstein, “and we are not nearly to the point where the majority of the population has received the vaccine.”