In a devastating blow to millions of Americans, economists from Goldman Sachs have stated that they don’t expect the second round of stimulus package anytime soon. They have also stated that the US economy will slow down further.
The COVID-19 related lockdowns have affected not just the US economy, but the world economy at an unprecedented level. Even so, things seemed positive as many economists claimed that the economy will start to recover slowly.
However, Goldman Sachs economists have released a statement that points at grim realities. The statement said that they do not expect lawmakers in Washington DC to seal a deal before the House goes into recess in the first week of October. If so, Americans will have to wait for the second stimulus package until after the presidential elections. Many economists raised concerns saying that the US economy needs stimulus money now, waiting a couple of months would be too late.
Lack Of Stimulus Package Before Presidential Elections Will Have Devastating Consequences
Earlier, Goldman Sachs has released an estimated fiscal analysis predicting that the US economy will grow by 6 percent. However, this prediction has been based upon assumptions that the second stimulus package would be released by Congress. They had hoped that the stimulus money would come with a price tag of $1 trillion, which could have effectively kickstarted the US economy.
However, economists at Goldman Sachs have now revised their projection.
According to statements released by Sachs, apart from extra benefits for unemployed Americans, Congress is unlikely to release any stimulus money before 2021.
They further said that the disposable income of Americans will reduce significantly, which will affect demand, which in turn will lead to a slowing US economy.
On annual basis, Goldman Sachs predicts that the country’s gross domestic product will increase by a mere 3 percent in the 4th quarter.
US Economy Depends On The Outcome Of The November Presidential Elections
The Goldman Sachs economists also indicated that stimulus money will pour in next year. They believe that the stimulus package will increase US gross domestic product by 5.8 percent. However, they also mentioned that 2021’s outcomes largely depend on the November presidential elections.
Goldman Sachs report comes after several such pleas to the Washington lawmakers to release a stimulus package. The Business Roundtable, initially, had expressed similar views on the lack of stimulus money.
Meanwhile, a bipartisan stimulus bill introduced by a bipartisan caucus was dismissed by Speaker Pelosi and Congress last week. It’s tough to say if a stimulus package will be released before the House goes into recess as the deadline gets closer.
Last week, Speaker Pelosi said that, if needed, the Democrats will pass the bill without the Republicans before they go into recess.