Expert Pitch
Virginia Tech

$2 trillion government stimulus: Will it be enough?

25-Mar-2020 4:30 PM EDT, by Virginia Tech

As Congress hustles to wrap up work on a massive $2 trillion relief bill – the largest stimulus package in U.S. history – Virginia Tech financial expert Derek Klock evaluates whether it will be enough. 

"Two trillion dollars is about 10 percent of gross domestic product, or GDP.  That's huge, but whether it’s enough is tough to say. If we get through this by late May or early June then government might not even need to spend that. If this goes on four to six months or we reopen too soon and have an ‘echo’ spread this fall, it won't be enough to do the same level of support again."

The package is designed to rush financial assistance to Americans through direct checks to households. 

“It will help by allowing a broad cross-section of Americans, whose spending represents over 65 percent of the economy, to pay bills on time, or at least not have to make tough choices on which bills to pay in any given month,” said Klock.  “This is really important and not talked about much. Bill payment is very important to the health of the financial system.  If credit cards, mortgages, or autos loans remain unpaid for extended periods of time, they are deemed non-performing. This means that banks must hold additional capital against potential default.  This, in-turn, reduces the bank’s capacity to lend, which is what leads to a credit crunch that monetary policy is attempting to avoid.”

Other aspects of the stimulus set to be voted on include:

  • $367 billion for loans to small businesses. “This provision is super important – maybe the most important. So many people are employed by small businesses and yet small businesses don’t have an alternative method for financing,” according to Klock. “All of the monetary stimulus from the Federal Reserve - reducing the federal funds rate, easing bank reserve requirements -are aimed at encouraging banks to lend.”
  • $150 billion for hospitals. “Hospitals are going to come under extreme pressure to diagnose and treat victims of the virus and the administration has repeatedly indicated that they don’t want the financial burden of this to be on the shoulders of Americans,” said Klock. “How exactly this fund will assist is yet to be determined but it should at a minimum help hospitals defray the costs of building out systems, building temporary shelters and testing locations, and ramping up bed space to house, test, and treat the ill.”

Regarding President Trump’s call to re-start the economy in early April, Klock said:  “I would tend to agree with the medical experts that the country is most likely looking at a longer period of self-isolation-driven closures, but understand the president’s desire for upbeat outlooks. One middle ground that might be discussed is targeted reopening of geographic areas that seem to have the virus spread under control.  However, this will greatly depend on the American people to act very prudently with any potential illness.” 

Derek Klock is a professor of practice of finance in the Virginia Tech Pamplin College of Business.

Schedule an interview

To secure a live or recorded interview with Derek Klock, contact Bill Foy by email, or by phone at 540-998-0288.  

Our studio

Finding reliable experts for media interviews is especially important during this difficult time. Virginia Tech's television and radio studios can broadcast live HD audio and video to networks, news outlets, and affiliates interviewing Virginia Tech faculty and staff. The university does not charge for use of its studios. Video is transmitted by LTN Global Communications; Skype, FaceTime, or similar products; or file sharing (Dropbox, Google Drive, We-Transfer, etc.). Radio interviews can be transmitted by ISDN, Comrex, phone, smartphone recording, or file sharing.  

Filters close

Showing results

110 of 5639
access_time Embargo lifts in 2 days
Embargo will expire: 20-May-2021 10:00 AM EDT Released to reporters: 14-May-2021 2:40 PM EDT

A reporter's PressPass is required to access this story until the embargo expires on 20-May-2021 10:00 AM EDT The Newswise PressPass gives verified journalists access to embargoed stories. Please log in to complete a presspass application. If you have not yet registered, please Register. When you fill out the registration form, please identify yourself as a reporter in order to advance to the presspass application form.

Released: 14-May-2021 11:25 AM EDT
Access to overdose-reversing drugs declined during pandemic, researchers find
Beth Israel Lahey Health

In a new study, clinician-researchers at Beth Israel Deaconess Medical Center (BIDMC) analyzed naloxone prescription trends during the COVID-19 pandemic in the United States and compared them to trends in opioid prescriptions and to overall prescriptions.

Released: 14-May-2021 11:00 AM EDT
No Excuses: Stop Procrastinating on These Key Health Checks
Michigan Medicine - University of Michigan

A quick guide to the most-valuable preventive care that adults need to get scheduled, to catch up on what they may have missed during the height of the pandemic, and to address issues that the pandemic might have worsened.

Released: 13-May-2021 7:05 PM EDT
FLCCC Statement on the Irregular Actions of Public Health Agencies & the Disinformation Campaign Against Ivermectin
Front Line COVID-19 Critical Care Alliance (FLCCC Alliance)

FLCCC Alliance calls for whistleblower to step forward from within WHO, the FDA, the NIH, Merck, or Unitaid to counter this misrepresentation

Newswise: shutterstock_1724336896.jpg
Released: 13-May-2021 12:55 PM EDT
Kreuter receives $1.9 million in grants to increase vaccinations in St. Louis
Washington University in St. Louis

Matthew Kreuter, the Kahn Family Professor of Public Health at the Brown School, has received $1.9 million in grants to help increase COVID-19 vaccinations among Blacks in St. Louis City and County.

Released: 13-May-2021 11:35 AM EDT
COVID-19 mRNA Vaccines are Immunogenic in Pregnant and Lactating Women, Including Against Viral Variants
Beth Israel Deaconess Medical Center

In a new study from Beth Israel Deaconess Medical Center researchers evaluated the immunogenicity of COVID-19 mRNA vaccines in pregnant and lactating women who received either the Pfizer or Moderna COVID-19 vaccines. They found that both vaccines triggered immune responses in pregnant and lactating women.

Released: 13-May-2021 10:30 AM EDT
Pandemic stigma: Foreigners, doctors wrongly targeted for COVID-19 spread in India
Monash University

The Indian public blamed foreigners, minority groups and doctors for the rapid spread of COVID-19 across the country during the first wave, due to misinformation, rumour and long-held discriminatory beliefs, according to an international study led by Monash University.

Released: 13-May-2021 9:15 AM EDT
28 Community Programs Receive Grants Through Penn Medicine CAREs Program
Perelman School of Medicine at the University of Pennsylvania

Penn Medicine CAREs awarded grants to 28 projects, many of which aim to fill vast needs in the community created by the COVID-19 pandemic, while others seek to improve diversity, equity, and inclusion.

Showing results

110 of 5639