Governments announce vast economic stimulus package

Both the UK and US governments have announced a vast economic stimulus package, in this time of crisis, to prop up collapsing economies

Governments throughout the western world have begun to announce sweeping measures in an effort to combat the economic chaos engulfing society. The stimulus packages announced by both the US and British governments are unlike any seen since 2008.

The US Treasury Secretary,  Steven Mnuchin, yesterday stated that the US government maybe willing to send each American a $1,000 cheque to help them survive the economic turmoil. This is part of a wider stimulus package worth over $1 trillion.

Similarly in the UK, Chancellor of the Exchequer, Rishi Sumak, expanded on his Budget promises last week to announce many more measures to help small and medium businesses. £330 billion will be spent to help these businesses survive via both loans and grants.

Such measures from both nations would have been unimaginable a month ago but as fear raises within western economies drastic measures have been taken. Just last month, Trump was boasting of the record breaking stock market.

Breaking convention

For both the UK and US their governments represent the right-wing policies, particularly economically. Yet both are using government spending in a left-wing manner in an effort to save the economy from crisis.

As of yet there has been little in the way of announcements for big businesses that may be seeking bailouts. Already there have been questioned asked of their behaviour since 2008. For many airline companies they have used the quantitative easing we have seen in previous years to purchase their own stock. With stock plummeting they now have their hands tied.

Stock markets continue to slide

Despite the measures taken yesterday, the FTSE 100 has still opened with a drop, down 4.5% so far today. With the US Stock Market due to open at 1.30pm (GMT) it remains to be seen how they will respond.

Questions have also been asked as to whether central banks will have any further tools at their disposal now that rate cuts have been implemented and money has been pumped in.

There may be more reactive measures that come into effect, yet there is no guarantee that these could and would be successful.

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