In recent weeks, unprecedented global fiscal relief measures have been administered to support a global economy weathering the impact of widespread shutdowns and quarantines. The U.S. government recently enacted the CARES Act, the third piece of legislation for individuals, businesses, healthcare systems, and state and local governments negatively impacted by the disruption of the pandemic.
With an estimated price tag of over $2 trillion, the CARES Act is the largest fiscal stimulus package in U.S. history and is expected to provide stimulus representing more than 10% of GDP. The bill funds a wide range of stimulus measures, including direct payments to households, expanded unemployment benefits, small business loans (which may be forgiven subject to certain criteria), direct aid to states and hospitals, and tax breaks and loan guarantees for businesses. Moreover, policymakers in Washington are already crafting a follow-up bill, but both sides appear to be digging in on what it should include.
The impact of this pandemic on national and global economic activity remains highly uncertain and presently can’t be quantified. Recent data confirms that the slowdown was rapid and sharp. However, the massive fiscal and monetary stimulus efforts across the globe should help to mitigate the impact and better position economies for recovery once the disruption of the virus has subsided and restrictions are gradually lifted.
For more information on the CARES Act and how it may impact you or your business, please visit Plante Moran’s CARES Act resource center.
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