Trump Plans to Distribute $1 Trillion... Considering $1,000 Payment Per Person

Fed, Corporate Commercial Paper Purchases to Prevent Corporate Bankruptcies

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. government has unveiled a dual approach of cash payments and commercial paper (CP) purchases to prevent economic downturn caused by the spread of the novel coronavirus infection (COVID-19). Along with a $1 trillion (approximately 1,240 trillion KRW) economic stimulus package, the central bank announced support measures encompassing both companies and individuals by purchasing CP.

According to local media such as The Wall Street Journal (WSJ) on the 17th (local time), the U.S. administration is preparing an economic stimulus plan exceeding $1 trillion, including small business loans and stabilization funds, and is currently consulting with Congress. Initially set at $850 billion, the plan is expected to exceed $1 trillion as a measure to provide cash payments to individuals was added. Bloomberg News reported, citing sources, that the stimulus package size has increased to $1.2 trillion.

This includes $300 billion for small business loans, $200 billion for stabilization funds, and $250 billion for cash payments, as well as costs related to tax deadline extensions.

The most notable item is the cash payment. It is reported that within two weeks, a plan to provide $1,000 per American is being discussed within the government. However, the payment target is expected to be limited based on income levels. President Donald Trump expressed his intention to "go big," and Treasury Secretary Steven Mnuchin said, "Americans need cash now, and the President wants to give cash."

The U.S. Federal Reserve (Fed) announced CP purchases on the same day to prevent corporate bankruptcies. After the stock market plunged despite interest rate cuts and quantitative easing (QE), the Fed took a more direct support measure. Accordingly, the Fed plans to establish a CP purchasing facility to supply funds directly to companies. This policy was implemented during the 2008 global financial crisis along with QE and zero interest rates.

This content was produced with the assistance of AI translation services.