Not only has the pandemic disrupted the lives of people living in the US and abroad, but it has also caused numerous global economic challenges. From putting an enormous strain on the healthcare systems of almost every country to changing the way people work and spend their free time, COVID-19 left several lingering effects. Policymakers are putting in the effort to create effective solutions for these problems, including the American Rescue Plan. According to the US Department of Treasury, by signing it into law, President Biden managed to provide Americans with one of the best periods of economic growth in a century.
While the American Rescue Plan is undoubtedly an effective response to severe public health and economic crises, it’s worth noting that the US economy is now also plagued by other serious issues. Russia’s war in Ukraine continues to inflict wounds by driving up global commodity prices, fueling inflation, and reducing economic growth in the US. The inflation rate has recently reached a high of 8.6%, as the cost of food, energy and living continues to grow across the US. Without the American Rescue Plan, the US would have come close to a downturn in the spring of 2021.
Effects of the American Rescue Plan
The American Rescue Plan has helped millions of Americans change their lives for the better, by providing them with better access to COVID-19 vaccines and treatments, granting economic relief to families to avoid poverty, averting evictions, and helping American businesses survive during these hard times. According to the Department of the Treasury, over $1 trillion was spent on programs and loans provided under the American Rescue Plan or other similar programs. The plan is also credited with accelerating economic recovery and helping Americans build a better future.
According to President Joe Biden, the American Rescue Plan is founded on the idea that recovery should help all Americans prosper. Millions of people lost their jobs during the pandemic, and a lot of American families were forced to live in their cars. “We came in with a fundamentally different economic vision: An economy that grows from the bottom up and the middle out. It’s good for everyone because when the middle class does well, the poor have a ladder up and the wealthy still do very well,” the President said.
Recession Fears on the Rise
Despite the beneficial effects of the American Rescue Plan, the global and US economy is still unstable. According to economists quoted by the Financial Times, concern is growing after the Federal Reserve made the decision to raise the interest rate by 75 basis points to counter the record inflation rate. Moreover, with Russia’s war in Ukraine now expected to continue, fears that Europe may soon be confronted with a reduction in the deliveries of natural gas are increasing pressure on the global economy. According to economists, there is a risk of a new recession in both Europe and the US.
Unlike the economists, US Treasury Secretary Janet Yellen said a recession is not imminent, although economic growth is likely to slow down in the US. “It’s been growing at a very rapid rate as the liberal market is recovering. We’ve reached full employment. It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable,” she said during an ABC News interview. President Joe Biden seems to agree with Yellen and also mentions the fact that the US is in a stronger position than any other country to overcome inflation.
Overcoming Inflation and Other Issues
There’s no question about the fact that the pandemic, the geopolitical crisis in Ukraine, and soaring inflation rates are all serious issues that are affecting the US economy and preventing stable growth. However, effective measures, like the American Rescue Plan and other similar recovery programs, can help US citizens and businesses survive this economic crisis, and build an even stronger economy in the near future. While overcoming inflation depends on solving the conflict in Ukraine, the good news is that the US economy seems well-prepared to face these uncertain times.
