What would you recommend the federal government due to close our current recessionary output gap? Use the AD-AS model, The class readings on fiscal policy and the descriptive details contained in the July 22, 2020 article from the economist titled “Congress and COVID-19” to describe your policy proposals. Congress and covid-19 - America's backwards coronavirus strategy ..https://www.economist.com/united-states/2020/07/22/americas-back.unlikely to fly this time.The negotiations, which began in earnest only this week, must resolve manydifferences. Democrats would like to extend the generous unemployment benefitsuntil the end of the year. Republicans worry that these are too generous. Indeed, forthe majority of eligible workers, the benefits now exceed their former wages (seearticle). The Democratic proposal would send nearly $itrn to shore up the budgetsof states and cities. Republicans worry that this generosity would reward profligacyin pre-pandemic times. Mr McConnell seems to have two priorities: passing aliability shield for businesses from lawsuits over covid-19 exposure andincentivising schools to reopen with cash grants. Both sides at least seem amenableto sending another unconditional cheque to Americans, regardless of employmentstatus.President Donald Trump is not a direct interlocutor in these negotiations, leavingSteven Mnuchin, his treasury secretary, as the administration's ambassador. MrTrump has offered some policy suggestions, but they are not being taken veryseriously, even among senators and representatives of his own party. One is that thebill include a holiday for the payroll taxes that employers pay for Social Securityand Medicare, the government programmes that provide pensions and healthinsurance for the elderly. This would do nothing to benefit the currently employed,but it would deplete the trust funds for both schemes. A second, reported in theWashington Post, is that the bill should strip out billions in funding for additionaltesting for covid-19. Mr Trump has been insisting that the rise in cases is due to therise in tests. "Many of those cases are young people that would heal in a day," hetold Fox News. "They have the sniffles, and we put it down as a test."Step back, and this strategy of repeated enormous stimulus to cushion the blow ofan ineffectual national strategy for containment resembles a hospital that investsmightily in palliative care while eliminating the oncology department. America hasalready spent 13% of GDP on fiscal stimulus, with more on the way. The mostimportant economic policy, in the absence of a vaccine, is to contain the virus'sspread. Leaving it all up to governors no longer seems like a viable White Housestrategy. Nor does the campaign of attacking the public-health messenger, AnthonyFauci.Facing flagging confidence in his handling of the crisis (and trailing in polls behindJoe Biden, his Democratic challenger), Mr Trump has resurrected his dailycoronavirus briefings. Presidential leadership of this sort might be expected to addcoherence and clarity to what has been a helter-skelter national strategy. In MrTrump's case, it's likely to make things worse. -This article appeared in the United States section of the print edition under theheadline "Spot trades"3 of 3Government finances - After the disease, the debtLendesThe ePage 1 1 / 499%+Congress and covid-19 - America's backwards coronavirus strategy .https://www.economist.com/united-states/2020/07/22/americas-back.The federal government's approach is like a hospital that invests in palliative carewhile abolishing the oncology departmentTHE SENATE'S status as "the world's greatest deliberative body", as President JamesBuchanan allegedly described it, has been exaggerated for a while. Legislation isaccomplished not through considered debate, but rushed, secretive crafting of lawby senior party leaders on the eve of some cataclysmic deadline. In the past decadethis brinkmanship has led to one struggle over "sequestration", two debt-ceilingcrises and three shutdowns of the federal government, but little in the way ofsubstantive lawmaking. The same dynamic will shape the latest gargantuanstimulus package needed to cushion the fallout from the epidemic of covid-19. Butthis time, the consequences of brinkmanship and delay could be even more severe.When Congress passed the CARES Act, a fiscal-stimulus package costing $2.2trn, inMarch, it included important stabilisers for an economy placed in a medical coma.Among these were much-increased unemployment benefits-boosted from $370 aweek on average to $970-and a suspension of evictions and foreclosures infederally backed housing until the end of July. These measures were set to expireafter four months, by which time the epidemic was expected to be under control.That is not the case. New confirmed infections are surpassing their previous peaksin mid-April, sometimes exceeding 70,000 per day. The unemployment rate inJune was 11.1%, and the Congressional Budget Office (CBO) expects it to declineonly modestly to 8.4% in 2021. The "V-shaped recovery" that America had hopedfor seems out of reach. About 18m are still unemployed, compared with 6m beforethe recession. Surveys from the Census Bureau show that 16% of adults who owerent or mortgage payments missed them last month, and 11% report that they donot have enough to eat at least some of the time (compared with 8.8% in earlyMarch). Eviction notices, many filed by landlords who are also struggling, havebegun to pile up.Hence the need for another stimulus package. Democrats released their proposal, a$3.4trn behemoth called the Heroes Act, two months ago. Republicans have gonefrom suggesting a “pause" on future stimulus, as Mitch McConnell, the Senatemajority leader, said in May, to agreeing that something more is needed. TheRepublican counterproposal, which is yet to be fully unveiled, will be moremodestly priced, perhaps at $itrn or so. Neither side expects the bill to benegotiated by the end of the month, when the provisions on unemployment andevictions in the CARES Act expire. The resulting gap could up-end the lives ofmillions of American families and set the economy back.4Researchers from Columbia University calculate that without the enhanced safety-net benefits, the poverty rate would have risen by four percentage points,representing 12m people. Instead it has remained flat. Some of the moresophisticated proposals, such as indexing benefits to previous earnings up to amaximum level, are conceptually elegant but might delay cheques for weeks. Stateunemployment offices, reliant on antiquated computer software and few staff, havestruggled to implement something as simple as adding $600 to every cheque. First,though Congress needs to pass a law. A better solution to avoid recurring cliff-edges-automatically tethering unemployment generosity to local unemploymentrates, as Michael Bennet, a senator from Colorado, has proposed- would do a lot ofgood. But because it would limit political leverage in future negotiations, it is2 of 3Page 1 of 2

Question

What would you recommend the federal government due to close our current recessionary output gap? Use the AD-AS model￼, The class readings on fiscal policy and the descriptive details contained in the July 22, 2020 article from the economist titled  “Congress and COVID-19” to describe your policy proposals.￼ Congress and covid-19 - America's backwards coronavirus strategy ..https://www.economist.com/united-states/2020/07/22/americas-back.unlikely to fly this time.The negotiations, which began in earnest only this week, must resolve manydifferences. Democrats would like to extend the generous unemployment benefitsuntil the end of the year. Republicans worry that these are too generous. Indeed, forthe majority of eligible workers, the benefits now exceed their former wages (seearticle). The Democratic proposal would send nearly $itrn to shore up the budgetsof states and cities. Republicans worry that this generosity would reward profligacyin pre-pandemic times. Mr McConnell seems to have two priorities: passing aliability shield for businesses from lawsuits over covid-19 exposure andincentivising schools to reopen with cash grants. Both sides at least seem amenableto sending another unconditional cheque to Americans, regardless of employmentstatus.President Donald Trump is not a direct interlocutor in these negotiations, leavingSteven Mnuchin, his treasury secretary, as the administration's ambassador. MrTrump has offered some policy suggestions, but they are not being taken veryseriously, even among senators and representatives of his own party. One is that thebill include a holiday for the payroll taxes that employers pay for Social Securityand Medicare, the government programmes that provide pensions and healthinsurance for the elderly. This would do nothing to benefit the currently employed,but it would deplete the trust funds for both schemes. A second, reported in theWashington Post, is that the bill should strip out billions in funding for additionaltesting for covid-19. Mr Trump has been insisting that the rise in cases is due to therise in tests. &#34;Many of those cases are young people that would heal in a day,&#34; hetold Fox News. &#34;They have the sniffles, and we put it down as a test.&#34;Step back, and this strategy of repeated enormous stimulus to cushion the blow ofan ineffectual national strategy for containment resembles a hospital that investsmightily in palliative care while eliminating the oncology department. America hasalready spent 13% of GDP on fiscal stimulus, with more on the way. The mostimportant economic policy, in the absence of a vaccine, is to contain the virus'sspread. Leaving it all up to governors no longer seems like a viable White Housestrategy. Nor does the campaign of attacking the public-health messenger, AnthonyFauci.Facing flagging confidence in his handling of the crisis (and trailing in polls behindJoe Biden, his Democratic challenger), Mr Trump has resurrected his dailycoronavirus briefings. Presidential leadership of this sort might be expected to addcoherence and clarity to what has been a helter-skelter national strategy. In MrTrump's case, it's likely to make things worse. -This article appeared in the United States section of the print edition under theheadline &#34;Spot trades&#34;3 of 3Government finances - After the disease, the debtLendesThe ePage 1 1 / 499%+Congress and covid-19 - America's backwards coronavirus strategy .https://www.economist.com/united-states/2020/07/22/americas-back.The federal government's approach is like a hospital that invests in palliative carewhile abolishing the oncology departmentTHE SENATE'S status as &#34;the world's greatest deliberative body&#34;, as President JamesBuchanan allegedly described it, has been exaggerated for a while. Legislation isaccomplished not through considered debate, but rushed, secretive crafting of lawby senior party leaders on the eve of some cataclysmic deadline. In the past decadethis brinkmanship has led to one struggle over &#34;sequestration&#34;, two debt-ceilingcrises and three shutdowns of the federal government, but little in the way ofsubstantive lawmaking. The same dynamic will shape the latest gargantuanstimulus package needed to cushion the fallout from the epidemic of covid-19. Butthis time, the consequences of brinkmanship and delay could be even more severe.When Congress passed the CARES Act, a fiscal-stimulus package costing $2.2trn, inMarch, it included important stabilisers for an economy placed in a medical coma.Among these were much-increased unemployment benefits-boosted from $370 aweek on average to $970-and a suspension of evictions and foreclosures infederally backed housing until the end of July. These measures were set to expireafter four months, by which time the epidemic was expected to be under control.That is not the case. New confirmed infections are surpassing their previous peaksin mid-April, sometimes exceeding 70,000 per day. The unemployment rate inJune was 11.1%, and the Congressional Budget Office (CBO) expects it to declineonly modestly to 8.4% in 2021. The &#34;V-shaped recovery&#34; that America had hopedfor seems out of reach. About 18m are still unemployed, compared with 6m beforethe recession. Surveys from the Census Bureau show that 16% of adults who owerent or mortgage payments missed them last month, and 11% report that they donot have enough to eat at least some of the time (compared with 8.8% in earlyMarch). Eviction notices, many filed by landlords who are also struggling, havebegun to pile up.Hence the need for another stimulus package. Democrats released their proposal, a$3.4trn behemoth called the Heroes Act, two months ago. Republicans have gonefrom suggesting a “pause&#34; on future stimulus, as Mitch McConnell, the Senatemajority leader, said in May, to agreeing that something more is needed. TheRepublican counterproposal, which is yet to be fully unveiled, will be moremodestly priced, perhaps at $itrn or so. Neither side expects the bill to benegotiated by the end of the month, when the provisions on unemployment andevictions in the CARES Act expire. The resulting gap could up-end the lives ofmillions of American families and set the economy back.4Researchers from Columbia University calculate that without the enhanced safety-net benefits, the poverty rate would have risen by four percentage points,representing 12m people. Instead it has remained flat. Some of the moresophisticated proposals, such as indexing benefits to previous earnings up to amaximum level, are conceptually elegant but might delay cheques for weeks. Stateunemployment offices, reliant on antiquated computer software and few staff, havestruggled to implement something as simple as adding $600 to every cheque. First,though Congress needs to pass a law. A better solution to avoid recurring cliff-edges-automatically tethering unemployment generosity to local unemploymentrates, as Michael Bennet, a senator from Colorado, has proposed- would do a lot ofgood. But because it would limit political leverage in future negotiations, it is2 of 3Page 1 of 2

Accepted Answer

The economies around the globe are involved in various economic and financial activities. These…