India's First International News Journal

India's First International News Journal

Friday, July, 1, 2022

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Coronavirus crisis: America’s corporations are calling for state aid

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Republican Congressman Matt Gaetz from Florida, a staunch Trumpian, described the situation in Washington on Fox News as follows: All corporate lobbyists are now preparing urgent calls for state aid.

But the government should not help companies, but workers, the MP demanded. Gaetz is thus part of a colorful front of politicians who do not want to simply drop industrial aid: it ranges from the Republican Mitt Romney to the democrat Elisabeth Warren and involves economists from various schools of thought.

The first step towards obtaining subsidies are already known. The airlines would like to have $ 50 billion. Your planes are at most a quarter full, many flights are canceled. The industry has already managed to be included in an $ 850 billion economic stimulus package released on Tuesday that the White House would like to have adopted this week.

America’s oil frackers, many of which are heavily indebted and threatened with bankruptcy, have already received relief. President Donald Trump had already promised last Friday that the government would top up the Strategic Petroleum Reserve by buying oil for around $ 2.6 billion. However, the financing is still not entirely clear.

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The casino industry is also hoping for state aid, whose business is gradually coming to a standstill because states are closing the facilities. The American Gaming Association made an emergency call: politicians should urgently rush to help the workers and companies that bear the brunt of the development. The industry generates $ 41 billion annually and directly and indirectly, employs 1.8 million people. According to the Wall Street Journal, the supplicants include aircraft manufacturer Boeing, who has been in trouble for some time because of the construction problems of the 737 Max model.

Trump has already expressed sympathy for a state injection of finance for airlines. After all, they could not do anything for the fatal development. But resistance is growing especially against the airlines. According to Bloomberg, listed airlines have spent more than 90 percent of their cash flow on share buyback programs over the past ten years, rather than building a financial cushion against disasters. The share purchase programs for regular increases in the salaries of management staff, the remuneration of which partly depends on share prices. Boeing’s requests are faced with similar counter-arguments. The company has bought back $ 100 billion in stock since 2013, driving debt so high that ratings agencies are now devaluing their bonds.

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Industry bailouts are no stranger to Washington. Under Barack Obama, the banks and the American auto industry were saved after the financial crisis. Airlines received grants after the September 11, 2001 attacks on the World Trade Center. Trump jumped at $ 28 billion in America’s trade war with China farmers.

But not only economists doubt that saving large corporations is currently the priority. Many workers are losing their jobs, as can already be seen. Others, as sole proprietors, are at risk of falling orders. With this in mind, Mitt Romney, the Utah senator, suggested that each American be given a quick gift of $ 1,000. His democratic colleague Elisabeth Warren also wants a quick aid program for little people. Many families would face the oath of disclosure without the next paycheck. You should receive direct grants instead of the planned tax breaks. The White House’s $ 850 billion plan provides for a cut in social security tax as its largest item. Economists criticize that it currently has no great effect because the conservative economist Greg Mankiw explains that it does not help the many people who are currently unable to work.

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Author

Jasbir Singh
Jasbir Singh
Studied humanities in Punjab. Trying to understand Indian Politics. Writing about Technology, Education, Brands, Business, and much more. Writer at The Eastern Herald.

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