15 years: Macroeconomist
The American Rescue Plan is the $1.9 dollar trillion fiscal stimulus to the US economy initiated by President Biden and signed into law on the 11th of March 2021. In this video, Corrado introduces the $1.9tn American Rescue Plan, and the areas that will be targeted. He also outlines the predicted impact of the plan on US and Global GDP.
The American Rescue Plan is the $1.9 dollar trillion fiscal stimulus to the US economy initiated by President Biden and signed into law on the 11th of March 2021. In this video, Corrado introduces the $1.9tn American Rescue Plan, and the areas that will be targeted. He also outlines the predicted impact of the plan on US and Global GDP.
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12 mins 28 secs
The American Rescue Plan is projected to boost GDP growth and provide economic aid specifically to the medium-low income households/individuals. The plan will have global spillover effects with world output expected to increase by 0.9%.
Key learning objectives:
What is the American Rescue Plan?
What are the key elements of the economic aid package?
Will the stimulus have a spillover effect to other parts of the world?
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
The American Rescue Plan is the $1.9 trillion dollar fiscal stimulus to the US economy initiated by President Biden and signed into law on the 11th of March 2021. The American Rescue Plan, corresponding to 9 percent of nominal US GDP, is a complex mix of fiscal changes over the course of next 10 years, although most changes – worth about $1.5 trillion – are expected to take place in the 2021 fiscal year.
The economic aid of the package is mostly aimed at low- and middle-income Americans. Its key elements include:
Around 44 percent of the extra spending goes directly to individuals in the form of cheques or cash payments of up to $1,400 per person; unemployment benefit insurance; childcare; and homeowner assistance. A further 30 percent is for State Aid to assist with the local financial burdens imposed by Covid-19 and there is an additional $125 billion for Covid-related public health measures.
It is expected to increase US GDP by 3 percent in 2021 and by 2.25 percent in 2022. This is happening as the increased demand from households and government is mainly expected to boost private investment. However, increased domestic demand and an appreciation of the dollar would raise US imports, leading to a deterioration of the net trade position, and acting as a counteracting factor to GDP growth.
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