A $10 Trillion Response To The Global Pandemic


empty hospital beds

Preventing the spread of COVID-19 will require the vigilance and cooperation of everyone on the planet in some capacity or another. While we await effective treatments and a vaccine to be developed, the most impactful thing people can do is keep their distance from others and, of course, wash their hands. To that end, California, New York, Illinois, and other states have imposed stay-at-home orders, joining a growing number of countries around the world, some of which are fining people and companies that choose not to comply. People entering Australia from abroad right now face up to $11,000 in fines and six months in jail for ignoring a 14-day self-isolation quarantine.

These extreme measures appear to be having great success, particularly in Asian countries. Whereas the number of cases continues to rise in Italy, Spain, Iran and elsewhere, the number has begun to stabilize, if not plateau, in Asian countries. China, in fact, reported a drop in new cases on Monday, reversing four straight days of increases.

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Spread of COVID-19 has slowed in Asian countries


Synchrony among central banks and finance ministers will be key in softening the virus’s economic and financial blow, which by some projections could be unprecedented. Goldman Sachs estimates that the U.S. economy could contract as much as 24 percent—roughly one-fourth—in the second quarter alone.

Such a drop, according to Goldman analysts, “would be nearly two-and-a-half times the size of the largest quarterly decline in the history of the modern GDP statistics.”

Get Ready for Synchronized Monetary and Fiscal Stimulus

As a result, we’re seeing rates being cut to near-zero—at least 38 central banks lowered rates last week alone—while fresh rounds of quantitative easing (QE) are quickly being rolled out. Unheard-of amounts of money are being printed to add liquidity, with more on the way.

On the fiscal side of things, President Donald Trump announced on Friday that the government will be waiving all interest payments on student loans and pushing back the income tax deadline to July 15. This is on top of a mammoth $1 trillion stimulus package, which is currently being debated in the Senate after failing to be passed Sunday night on opposition from Democrats..

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