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 2539
Released: 13-Jul-2020 4:05 PM EDT
OADN & AACN Secure No-Cost Access to COVID-19 Screening Solution Until Vaccines Become Widely Available
Organization for Associate Degree Nursing (OADN)

OADN & AACN Secure No-Cost Access to COVID-19 Screening Solution Until Vaccines Become Widely Available

Newswise: Study suggests lymphoma drug acalabrutinib might offer a potential therapeutic approach for severe COVID-19 infection
Released: 13-Jul-2020 3:45 PM EDT
Study suggests lymphoma drug acalabrutinib might offer a potential therapeutic approach for severe COVID-19 infection
Hackensack Meridian Health

The mechanisms of action of acalabrutinib led to the hypothesis it might be effective in reducing the massive inflammatory response seen severe forms of COVID19. Indeed, it did provide clinical benefit in a small group of patients by reducing their inflammatory parameters and improving their oxygenation.

Newswise: National Virtual Biotechnology Laboratory Unites DOE Labs Against COVID-19
Released: 13-Jul-2020 3:40 PM EDT
National Virtual Biotechnology Laboratory Unites DOE Labs Against COVID-19
Department of Energy, Office of Science

To focus its efforts against the COVID-19 pandemic, DOE is bringing the national laboratories together into the National Virtual Biotechnology Laboratory.

Newswise: Key Insights from Swedish Casino that Remained Open During COVID-19
Released: 13-Jul-2020 3:40 PM EDT
Key Insights from Swedish Casino that Remained Open During COVID-19
University of Nevada, Las Vegas (UNLV)

As casinos in Las Vegas enter the second month of reopening since the COVID-19 pandemic took hold, UNLV gaming researchers say they can draw upon insights from industry collaborators in Sweden, a country that took a more open approach to the crisis compared to other governments.

Released: 13-Jul-2020 3:05 PM EDT
Asymptomatic Transmission and Reinfection of COVID: Live Event for July 16, 2PM EDT
Newswise

Emerging data shows more risk of asymptomatic transmission and reinfection with COVID than previously thought. Experts will discuss these findings and what are the implications for managing the pandemic. Media are invited to attend and ask questions.

Released: 13-Jul-2020 2:40 PM EDT
Engineered llama antibodies neutralize COVID-19 virus
Rosalind Franklin Institute

Antibodies derived from llamas have been shown to neutralise the SARS-CoV-2 virus in lab tests, UK researchers announced today.

Released: 13-Jul-2020 1:25 PM EDT
1 in 3 young adults may face severe COVID-19
University of California, San Francisco (UCSF)

As the number of young adults infected with the coronavirus surges throughout the nation, a new study by researchers at UCSF Benioff Children's Hospitals indicates that youth may not shield people from serious disease.

Released: 13-Jul-2020 12:25 PM EDT
Scientists discover key element of strong antibody response to COVID-19
Scripps Research Institute

A team led by scientists at Scripps Research has discovered a common molecular feature found in many of the human antibodies that neutralize SARS-CoV-2, the coronavirus that causes COVID-19.

Released: 13-Jul-2020 11:15 AM EDT
UTHealth joins study of blood pressure medication’s effect on improving COVID-19 outcomes
University of Texas Health Science Center at Houston

An interventional therapy aimed at improving survival chances and reducing the need for critical care treatment due to COVID-19 is being investigated by physicians at The University of Texas Health Science Center at Houston (UTHealth). The clinical trial is underway at Memorial Hermann and Harris Health System’s Lyndon B. Johnson Hospital.


Showing results

110 of 2539

close
3.11091