Neel Kashkari, the current President of Federal Reserve Bank of Minneapolis, has deemed another nationwide shutdown to be necessary — but this time, it is an economic shutdown. The shutdown is meant to last for six weeks. The purpose of this shutdown is to keep the novel coronavirus under absolute control. The statement regarding the lockdown was made on Friday. Kashkari warned that the whole of 2020 will become even worse if the lockdown is not implemented. He believes it will be much worse than what America has experienced this far.
According to Kashkari, the next six months will play a very big role in how the virus will be controlled. Events that have taken place so far are just a short warm up. If the situation is not taken seriously, a major catastrophe could strike in the days to come. As many schools, colleges, universities, businesses, and stores reopen, the number of cases will increase. In fact, the greater need of indoor heating during the season will only aid in the spread of the virus. These were words from Kashkari, the President of the Federal Reserve Bank, and Dr. Michael T. Osterholm, the Director at the Center for Infectious Disease Research and Policy, in the University of Minnesota.
These comments were repeated once again in “Face the Nation”, which is broadcasted on CBS. Here, he argued that the country has to be placed again on lockdown for another six weeks, or at least a month. This time, the lockdown has to be implemented strictly. If the move is made, the number of active cases can be brought down easily. It will also be easier to engage in contact tracing and expedited testing. The above duration is necessary to control the spread of the COVID-19 virus.
On the other hand, President Trump has stressed states to urge and roll back all possible reopenings as much as possible. He stated in a meeting a few weeks ago that the nationwide shut down will not be implemented again.
Other concerns from Kashkari
Meanwhile, the shutdown was not Kashkari’s only concern. He also stated that more relief for the people needs to be provided by the Federal Government. He said that Congress needs to become much more aggressive. They should support people who have lost their jobs. This is important and the right thing to do. It is also crucial for the economic growth of the country, in order to minimize the lingering effects of COVID-19. Kashkari stressed on what would happen if the public is unable to pay their bills. It will combine into a huge wave and cause serious impact on the nation’s economy. The downturn will be several times worse than expected. In the upcoming days, people are bound to see issues like bankruptcy. However, this time, the rate of recovery will be several times slower.
Kashkari had to make these statements because Congress has stalled most of the economic relief offered to people around the country. Even when the House Democrats decided to pass a $3 trillion HEROES Act bill in the month of May, the Senate Republicans counteracted with a $1 trillion plan. Both sides have found it very difficult to find common ground in order for the HEROES Act to be passed and actually implemented. To be more precise, both parties have not gone anywhere since early May.
Decisions made by President Donald Trump
When it comes to making changes and taking decisions, COVID-19 has made the situation very difficult. This holds true for President Donald Trump, too. On Saturday, President Trump signed four executive orders. These orders were a part of a unilateral action believed to be brought by the impasse. The executive orders were signed from Trump’s Golf club in Bedminster, New Jersey.
The executive orders raised the unemployment benefit of the country from $200 to $400. Out of this, $300 will be given by the federal government, and the remaining 25 percent will be provided by each state government.
Additionally, Trump announced through his executive orders that a payroll-tax holiday will be given to people who earn less than $104,000 per year. This benefit will last until the very end of 2020.