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Coming soon: At least $1.7 trillion in government stimulus to help sick economies

Weekly jobless claims in the United States spiked as the coronavirus pandemic is costing many people their jobs. CNN's Christine Romans says it's moved from a "stock market crash to a job market crash."

Posted: Mar 21, 2020 5:50 AM
Updated: Mar 21, 2020 5:50 AM

Governments around the world have announced massive amounts of fiscal stimulus this week, aiming to limit the severity of a sharp recession as the coronavirus pandemic shuts down country after country.

Morgan Stanley says spending commitments from the United States, Europe, Japan, the United Kingdom and China add up to at least $1.7 trillion — so far.

"While the initial response from developed economies was slow, over the last few days — as economic and financial market disruptions persist — we have started to see strong commitments from policy makers, indicating a sizable fiscal expansion plan is in the offing," Morgan Stanley chief economist Chetan Ahya told clients this week.

That includes the $1 trillion package under discussion in the United States, which still needs Congressional approval. The plan was formally rolled out by Senate Republicans on Thursday, setting the stage for negotiations to begin in earnest.

The program includes $200 billion in loans to airlines and distressed industry sectors and $300 billion in forgivable bridge loans for small businesses. It also proposes direct payments to Americans under a certain income threshold — up to $1,200 for individuals and $2,400 for couples.

UBS estimates that fiscal stimulus this year will soar to nearly 2% of global GDP, exceeding what was approved in 2009 to fight the Great Recession. (That figure excludes credit guarantees.)

The global wave of stimulus pledges has been matched by action from central banks.

UBS said Thursday that 60% of central banks had slashed interest rates since January 20. Those cuts have been coupled with massive asset purchase programs, such as the European Central Bank's €750 billion ($803 billion) commitment this week.

But after years of low interest rates and bond buying, central banks are now running low on ammunition — adding pressure on governments to follow with more fiscal stimulus should their initial efforts prove insufficient.

Economists expect that governments will have to intervene further given the scale of the economic devastation that could unfold in the coming weeks and months.

Goldman Sachs said Friday that the US economy will shrink at an annual rate of 6% between January and March compared to the previous quarter, and a shocking 24% between April and June. It predicts a rebound in the second half of the year, but expects the world's largest economy to contract 3.8% for the year.

Andrew Hunter, senior US economist at research firm Capital Economics, called the $1 trillion stimulus plan "a first step" that will need to be followed up.

"With layoffs already surging and a clear risk that the lockdown now in place in California may have to be extended across greater parts of the country, significantly more fiscal support may still be needed to avoid a protracted recession," he told clients on Friday.

Kevin Hassett, an economist and former CNN commentator who is returning to the Trump administration to work on its coronavirus response, is bracing for an even more dire situation.

"We're going to have to either have a Great Depression, or figure out a way to send people back to work even though that's risky," Hassett told CNN's Poppy Harlow on Thursday. "Because at some point, we can't not have an economy, right?"

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 50300

Reported Deaths: 2748
CountyConfirmedDeaths
Marion11920692
Lake5432248
Elkhart347058
Allen2902133
St. Joseph205169
Hamilton1665101
Cass16449
Hendricks1446100
Johnson1325118
Porter80238
Tippecanoe7599
Clark68144
Vanderburgh6816
Madison67264
LaPorte60527
Howard59458
Bartholomew59345
Kosciusko5704
Marshall5308
Noble50128
LaGrange4829
Jackson4783
Boone47444
Delaware46952
Hancock46036
Shelby43525
Floyd40444
Morgan33631
Monroe32928
Grant30926
Dubois2976
Henry29717
Montgomery29720
Clinton2893
White26810
Decatur25532
Dearborn25423
Lawrence25225
Vigo2478
Warrick24329
Harrison21722
Greene19332
Miami1922
Jennings17912
Putnam1728
DeKalb1674
Scott1639
Wayne1536
Daviess15017
Perry1459
Orange13723
Steuben1362
Jasper1332
Franklin1278
Ripley1277
Wabash1152
Carroll1132
Gibson1132
Fayette1057
Whitley1045
Newton10010
Starke983
Huntington932
Randolph794
Wells791
Jefferson782
Fulton731
Jay680
Washington681
Knox670
Clay665
Pulaski661
Rush613
Posey550
Owen521
Benton510
Spencer501
Adams491
Sullivan471
Brown431
Blackford402
Fountain352
Crawford330
Tipton321
Switzerland300
Martin240
Parke230
Ohio220
Vermillion200
Warren151
Union130
Pike110
Unassigned0193

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 62856

Reported Deaths: 3032
CountyConfirmedDeaths
Franklin11433443
Cuyahoga8786393
Hamilton6563207
Lucas2889305
Marion274039
Montgomery237835
Summit2299209
Pickaway221641
Mahoning1907239
Butler176747
Columbiana135060
Stark1196114
Lorain109769
Trumbull103277
Warren94525
Clark79310
Delaware67515
Fairfield64317
Tuscarawas60110
Lake57022
Belmont56722
Medina56632
Licking56012
Miami50331
Portage48759
Wood47451
Clermont4537
Ashtabula44544
Geauga42543
Wayne37253
Richland3635
Allen34841
Greene3229
Mercer29510
Erie26722
Holmes2575
Darke25326
Huron2382
Madison2139
Ottawa16624
Sandusky15715
Washington14420
Coshocton1413
Ross1393
Crawford1385
Putnam13415
Hardin12312
Morrow1211
Athens1111
Auglaize1094
Jefferson1052
Muskingum961
Union931
Monroe8917
Hancock851
Lawrence820
Preble821
Hocking809
Clinton791
Guernsey793
Shelby744
Williams742
Logan681
Fulton660
Scioto650
Carroll643
Ashland632
Wyandot625
Brown601
Fayette550
Defiance533
Knox531
Champaign511
Highland491
Van Wert451
Perry411
Seneca402
Henry330
Paulding280
Jackson270
Pike270
Adams251
Vinton232
Gallia201
Noble130
Harrison121
Meigs120
Morgan120
Unassigned00
Fort Wayne
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Angola
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Huntington
76° wxIcon
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Decatur
Scattered Clouds
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Van Wert
Scattered Clouds
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Breezy, Sunny Saturday
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