Introduction
The current health crisis is considered to be a major cause of an increased level of unemployment, business shutdowns, and an overall economic collapse. The transportation sector is not an exception since the COVID-19 guidelines have restricted trading activities around the world. The article “Federal Stimulus Bill Set to Boost Transportation Interests with Payroll, Maintenance Funding” by Ben Ames discusses the bill passed by the House and Senate. In particular, the United States (US) government decided to take action to help firms to survive and accelerate economic recovery. Thus, the act is supposed to relieve the burden of unpaid invoices and stimulate companies’ operations.
Main body
During the pandemic, the industry has been functioning by delivering necessities such as food and other essential goods and services. However, it is not enough for businesses to compensate for expenses and keep employing front-line workers. Therefore, the bill is regarded as a critical measure, which must be taken by the government. To be more precise, 900 billion US dollars will be provided to organizations in different forms of payments across the country (Ames para. 1). A third of the sum will be distributed to small firms where there are “no more than 300 employees” and “a 25% or greater” decrease in total gross income is experienced (Ames para. 4). It is stated that companies have an opportunity to cut their tax installments by removing from them “eligible business expenses” (Ames para. 5). The Paycheck Protection Program is the previous bill by which 1.7 trillion US dollars will be directed to lower crucial business costs (Ames para. 5). Thereby, the regulation is intended to lessen corporate charges by offering a substantial stimulus check, contributing to further economic revival.
The introduction of the bill seems to fill legislators with enthusiasm and prepare for the next round of payments. One of the House representatives, Peter DeFazio, expressed the significance of the event as COVID-19 disrupted transportation activities, rendering workers unemployed (Ames para. 7). Nevertheless, it is not a “panacea” to the severe financial crisis as DeFazio emphasizes, and more work should be done and more communities need government support (Ames para. 7). DeFazio anticipates the Joe Biden administration to respond to the current situation, bringing an optimistic perspective to the future. Furthermore, the article provides a detailed breakdown of the bill initiative. Specifically, there are unemployment benefits, which will be offered to rail workers, considerable amounts are dedicated to airports, transportation departments, ports, and aviation employees (Ames para. 8). Steve Lamar, the American Apparel & Footwear Association official, conveys a similar opinion, stressing that the task of the economic upturn is to be continued in the year 2021. Thereupon, experts focus on the prospective acts, which will supposedly remedy the meltdown.
The scale of the stimulus plan is vast and promising to restore business operations. Indeed, the fiscal policy of increasing government expenditure to boost aggregate demand is a well-reasoned move. Firms will be able to pay off accumulated debts and start normal operations. However, less than half of the sum is allocated to small organizations, giving most to large corporations. Such companies are presumed to retain profit and gather it in special reserves for occasions akin to an economic slowdown. Taking into account that funds are coming from taxpayers’ pockets, a dilemma arises as to whom the money should be given. Giant corporations enjoy a sizeable market share, manipulating monopolistic or oligopolistic power. Hence, their status in the economy is too marked to ignore the losses they bear. Otherwise, the impact of bankruptcy and the downfall of such companies can devastate the entire industry and employment levels. Therefore, the bill initiative, taken by the government, is a controversial act considering the budget origin.
Consumption is one of the key components of aggregate demand. It refers to the total amount of goods and services, which are demanded in an economy in a given period at a certain price level. Conversely, the government could have directed funds available to encourage consumer expenditure. Moreover, the tactic enables them to spend on items so that businesses will earn their income. In the face of an ever-increasing level of idleness, the government should reflect on alternative ways to spend taxpayers’ money. On the other hand, the devastating impact of unemployment might be eased if firms dedicate more funds for workers’ maintenance. Therefore, it can be noted that the feasibility and usefulness of the bill being targeted at the corporate sector could be re-examined.
Conclusion
In conclusion, the stimulus introduced by the US government is designed to assist businesses across the nation to continue their operations during the pandemic. Moreover, it provides benefits to them by reducing expenses related to the transportation sector and workers’ support. Small firms can also enjoy opportunities for lessening tax payments and dealing with accrued charges. Specialists judge the bill as a necessary act that should have been taken by the authorities. They focus attention on the influence COVID-19 has on the working class, looking forward to furthering the process of economic recovery. However, in my opinion, the money can be managed to stimulate consumption level instead of financing large corporations and their augmented costs. Hence, consumers will spend on goods and services, inducing economic activities more effectively.
Reference
Ames, Ben. “Federal Stimulus Bill Set to Boost Transportation Interests with Payroll, Maintenance Funding.”DC Velocity, 2020. Web.