COVID-19: Drying Up Business Taxes & Impacting the US Economy - Essay Sample

Introduction

Covid 19 has led to a spectated strain of the economic sectors of numerous countries. Just like any other country, the local and state budgets in the USA have already started to buckle. Most taxes obtained from business taxes such as the sales tax revenue have been subjected to new procedures that act as a medically induced coma in the field. The economy suffers due to the drying up of these business taxes (The money machine that can save cities, 2020). Concerning the failure to obtain revenue, multiple funds channeled to other sectors have also started to dry up.

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Funds to pay different professionals; the teachers, medical support, emergency response teams are also drying up. Funds to maintain the community and improving the lives of people through the maintenance of things like road or funds to build low-income housing are also drying up.

The state's law follows the national law which requires the overall budget of the states and that of all cities to be balanced. It leads the state government to cut off services by laying off some employees. The employees experienced the largest blow in March where more than 14000 workers in the state government became unemployed. The figures could be more because the statistics were carried out by the Bureau of Labor Statistics before everyone went for a national lockdown in Mid-March.

Covid 19 crisis took everyone by a surprise and mostly the local officials. They did not know how to cope up with the crisis and it led them to delay in providing the costs to cater to medical supplies and total social safety insurance. The congress decided to allocate both the state and local governments a total of $150 billion (Pelton & Singh, 2019). The amount is far too minimal to be shared by the two. It is because, during other crises, the congress allocates trillions of dollars and approves them as a pandemic relief.

The federal also affirms that the allocated amount is too little. To make matters worse, the money arrives late. To respond to this, the central bank, the congress and the treasury have partnered to make an exceptional move of "backstopping the municipal bond market" to cater for local and state finances. The whole idea of the backstopping the municipal bond market is new and used for the first time. Its application is drawn differently. Municipal bond markets mean that the local and state governments are eligible to acquire loans from small and large investors.

It helps both local and state governments to support and grow their communities in the middle of the crisis; within the snug budgetary boundaries. The loan markets grants short term or long term loans. The Federal Reserve also confirms that they are currently backstopping the short term market. It assists the municipalities to handle and smoothen their revenues and also because investors have started showing unwillingness to lend more loans. The implementation has obtained a name form both the treasury and the Fed as Municipal Lending Facility. Congress sees fumbles at the implementation of the facility even though the Feds sees it as the only window that communities can gain money from and help them survive the crisis.

Summary for The Future of Monetary Policy Is Asian

According to the article "The Future of Monetary Policy Is Asian", the author suggests that, following the Corona Virus pandemic, most countries globally have undergone significant economic hit. Taking the case of Asian countries as the primary target of economic crippling after the closure of the China border which is the main trading partner, it may result in significant resemblance across the globe.

Similarly, Central banking for any country is likely to be facing significant change which may be hard to reshape to the normal state. In response to the decline in the global market, the Federal Reserve has significantly contributed to managing the financial platforms through several measures which aim at aiding those businesses which have been strike by the pandemic to maintain a normal curve (Moss, 2020).

The Fed has issued a mandate on reducing interest rates to zero to shore up the financial institutions and stabilize the market some of the actions which are highly considered to be evolutionary rather than evolutional. According to Jerome Powell, the earlier significant steps established based on the global financial crackdown assumes the Asian countries. The issue of monetary policy across the Asian countries has, however, experienced a significant change that had not been earlier experienced. The situation of the monetary policy extends beyond the Asian financial crisis and the period marking the great recession as experienced in the 1990s. assuming the current degree and impact, the various steps assumed by the Asian central bank has also created notable change in the global limits.

Policymakers are now shifting their worries towards a possible spike in general market prices. With little supply in the global market, most countries being significantly affected by the pandemic, it is possible that the decisions taken by the Asian countries will be highly adopted in Western countries. The Feds are likely to take action beyond the Western boundaries by putting into consideration what other countries in Asia are up to.

Summary for Has GDP Become an Impediment to a Better Society?

After the invention of GDP, the was a celebration event to establish the greatest invention of the 20th century. However, during the launch of the project, a cautionary note presented by the Chairman of the Fed indicated a fault which could expose a shortcoming of the GDP. There was an enormous amount spend on un-economically related activities such as the use of Air conditioning which has significantly resulted in questioning whether the GDP meets the expected standards. The main area of concern is whether the GDP meets the equality concerns as expected throughout the country (Has GDP become an impediment to a better society? 2017). The issue of imbalance in service delivery raises significant questions in addressing the needs of vast areas.

The assumption in GDP is that, there most content which we should value which has been excluded especially if it contains things that don't deserve to be valued. On the other hand, the main focus is on monetary aspects alone. The main concern raised is whether credit should be given to activities that participate in community welfare or activities which are considered to bring money. In a comparison of distinctive activities such as selling heroin and volunteer work, every state has its view on whether they should be inclusive.

The earlier publications such as Fioramonti focuses on GDP failures. The author argues that post-GDP may be aa mixed-up reality assuming almost all the earlier discoursed activities in both the political and economical arena. The book offers different arguments. The arguments state that we achieve and get what we measure. It also highlights that the measurement is subjected to what we see and ignore what is invisible. It is an abnormal way to think as we support the only thing that proves to add to economic activity without checking the consequences. The society view on the GDP components is among the major aspects which tend to hold us back from achieving such stages of after GDP.

References

Moss, D. (2020). The Future of Monetary Policy Is Asian https://www.bloomberg.com/opinion/articles/2020-04-19/the-future-of-monetary-policy-is-asianHas GDP become an impediment to a better society? (2017, March 17). Financial Times. https://www.ft.com/content/a9c7b6d8-08cc-11e7-ac5a-903b21361b43

The money machine that can save cities. (2020, April 23). Equitable Growth. https://equitablegrowth.org/ext_media/the-money-machine-that-can-save-cities/