whether the government Should help people and companies in crisis times? The question can be considered rhetorical: in the XXI century, and any state, rich or poor, in a crisis which has. But very uneven. Trillion aid package to citizens and business, adopted in the United States, forced to talk about the “American communism”- not work, they say, the Americans became even beneficial. We understand the objectivity of this thesis.
the American economy, as we know, the first in the world. Accordingly, the U.S. Congress passed a massive aid package to citizens and small businesses by $2 trillion. Obviously, after it is adopted yet another package for the same or even higher value (controlled by Democrats the House of representatives has already voted for $3 trillion in aid, and under the control of Republicans, the Senate is inclined to the smaller size of the second package).
Looking at these trillions, many Russians, and many people in the US believe that in America, thanks to pandemic COVID-19 came something like “Communist Paradise”: you can not work to pull the shovel money from the Federal government and the authorities of your state. I’m afraid that the “crisis of the welfare” of Americans is greatly exaggerated.
Let’s see what exactly can count conditional “Oklahoma taxpayer”?
In the first package of every American with an annual income up to $75,000 and received a lump sum of $1200, a married couple with an income of up to $150,000 – $2400, per child additional amount paid was $500. Those whose income exceeds the above limits, were paid reduced benefits. Nothing was given to those whose annual income exceeds $99 000 for one person or $198 000 on the couple.
These payments do not depend on works or not: they received all persons legally residing in the United States, with citizenship or without. Illegal immigrants (and they are in the U.S. there are 11-12 million people) left behind in these payments.
the Other part of the first aid package adopted hot on the heels of the announcement of the emergency and the closure of a large quantity of companies and enterprises Federal unemployment benefits. It was introduced in late March and is paid to people who lost their jobs before the end of July 2020 in the amount of $600 a week.
This amount does not replace, but complements the unemployment benefits a person gets from his staff. In different States the size of unemployment benefits vary considerably: in Washington state (not to be confused with the same city – the capital of the USA), for example, a weekly allowance without any crisis payments is $790 per week, and in the Mississippi – $235. Therefore, an unemployed resident of the city of Seattle, receiving a Federal Supplement of $600, has in the amount of $1390 per week (this already looks like a little bit more affordable salary), and a resident of the city of Jackson – $835 per week (this is also similar to a salary, but low).
Normal expiration of unemployment benefits up to 26 weeks, and now this added another 13 weeks. First-time unemployment benefits paid to self-employed workers, independent contractors and part-timers (those working part-time).
For small businesses provided by the state targeted loans to save the state workers. If the company does not fire people, the first eight weeks loan becomes non-refundable grant and payment of the remaining amount to get a respite from six months to a year. Small businesses may, in addition, immediately quick to $10 000 in the form of a lump sum, which does not have to be returned. Further, small businesses can obtain complete forgiveness of your past debts – loans made to coronavirus epidemic.
All this is good, but sometimes better. Foreign Policy magazine compares the response to the crisis of the American state and the authorities of other countries, particularly European. The comparison is not in favor of the United States – as evidenced first and foremost, labour market statistics: if in Germany the unemployment rate in April of this year was 5.8%, US 14.7 per cent. It is expected that in may the U.S. figure jumps to 20% or higher, while German, except that up to 6%.
Most American experts believe that what is happening in the U.S. labor market is a disaster approaching the scale of the great depression. The number of unemployed Americans exceeded 36 million And this is the main reason for the haste, without regard to the risk of an escalation of the epidemic, the abolition of restrictive measures in many States. Trump is afraid that the people’s discontent with the economic situation will undermine his chances for re-election in November. In those States, ruled by his supporters (FL, GA, TX), the authorities open all in a row, and how many lives it will cost – remains an open question.
Europe is much more cautious than America in terms of restrictions for the period of the pandemic. Neither in Germany nor in any other country there is no such inconsistency, as in the US, in terms of epidemiological norms and rules. But there is a much more rigid enforcement of them.
as for the material support of the population in the conditions of crisis, Europeans have used a different model than the US. This system was invented by the Germans, and then borrowed a number of other countries. It is called Kurzarbeit – “short work”. The state encourages employers not to dismiss employees, but only to reduce their working day; the state pays the employee up to 80-90% of their salaries. The people retain their jobs and return to full employment as the way out of the pandemic. In Germany, the site of tht CNN, the Kurzarbeit program of work about every fourth working inhabitant of the country, in France and Italy – every third. Programs of this kind are widely used in the Netherlands, the UK, Denmark and other countries.
This system has shown its effectiveness in the past. The crisis of 2008 and 2009, employment in Germany has decreased by only 1%, although the country’s GDP decreased by 7%. In the same period, the U.S. economy slipped by 4%, while employment fell by 5.4%. As they say, feel the difference.
According to the Nobel laureate, Professor of Economics at Columbia University Joseph Stiglitz, the US administration carries on for the support of the population “failed program” and “money does not go where they are needed most”. And Stiglitz, and many other American economists believe that the European system of direct subsidies to companies to pay salaries with the aim of preserving jobs is more effective than the us unemployment benefits.
as for measures to support small business, according to Goldman Sachs, only 29% of small and medium-sized companies that applied for preferential loans, received them. But, according to the Associated Press, “crisis benefit” was received by those for whom they were not intended – 94 large companies represented on the stock exchange and that have turnover in hundreds of millions of dollars.
ultimately, says Foreign Policy, the problem boils down to ideological differences between Europe and America. Americans have traditionally relied on the free market, which “itself will adjust”, and the state they believe “almost always a problem and almost never the solution”, says Nobel laureate new York University Paul Romer. As a result, the USA government has become organizationally and financially weak body, which is especially dangerous in a crisis situation.
There is another adverse for Americans factor. If other industrialized countries is the entire population covered by public health insurance in USA health insurance tied to work (exception – state medstrakhovka system for pensioners, the disabled, the poor and veterans of the armed forces). In 2019, more than 27 million Americans were denied health insurance and thereby access to costly treatment. With the advent of mers and the massive loss of jobs, the number of people without insurance has increased by a few million.
of Course, there is no perfection in the world, and Europe distant from it. Europeans believe the state and are more willing to give him taxes than Americans. But in Europe there is a prosperous North and poor South of the country – like States in the US. Rich northerners well help its citizens, but not in a hurry to allocate billions of euros to help poor southerners. And total “commuCommunist” equality neither between countries nor within each country. As he was not with us in the Soviet Union – although we are promised that “the present generation of Soviet people will live under communism”.
