The U.S. government’s massive effort to nurse the economy through the coronavirus crisis was billed as a send-money-and-don’t-sweat-the-details flood of cash to people and businesses in a $22 trillion system that has ground to a halt, Reuters informs.
From technological glitches to confusion over the fine points of policy, the delays are mounting. The federal government’s muddled response risks deepening and lengthening a recession already historic for the speed of its onset, Reuters adds.
States are struggling to process a historic mountain of unemployment claims on outdated technology. Large corporations, including companies slammed by the “social distancing” edicts keeping people at home, remain in the dark on the details of promised loans.
Small businesses by the millions are desperately seeking cash, while banks still lack the right paperwork days into a lending program, Reuters notes.
The Federal Reserve, quick to throw a backstop under large portions of the financial system and major corporations through open-ended bond purchases, has yet to complete a promised “Main Street” program of an all-encompassing safety net of credit.
Making matters worse, the original $2.3 trillion in aid that was passed by Congress late last month isn’t nearly enough, businesses warn.
Every day that passes without federal money getting to people is “an unnecessary hit to businesses and households across the U.S.,” said Gregory Daco, chief U.S. economist at Oxford Economics.
Speed was considered of the essence when the so-called CARES Act became law on March 27, committing the $2.3 trillion to make up for the wages and incomes lost after Americans were ordered to stay home to control the spread of the novel coronavirus.
It was a rare moment of bipartisanship in Washington, with both liberal and conservative economists mostly agreeing this was not the time to argue philosophical points about moral hazard, misplaced incentives, or the dangers of public debt, but to get money to people before they were bankrupt or hungry.