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Welcome to Our Generation USA!
This Page primarily covers the Economy of the United States, including how the United States impacts, and is impacted by, the Global Economy
The Economy of the United States and The World
YouTube Video: An Overview of Macroeconomics by University of California, Berkely, CA
Pictured: The Role of Supply and Demand
An economy is the production, distribution, or trade, and economic consumption of goods and services by a country. Understood in its broadest sense, 'The economic is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use and management of resources'.
Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency, but monetary transactions are only a small part of the economic domain.
Economic activity is spurred by production which uses natural resources, labor, and capital. It has changed over time due to
A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors.
These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
A market-based economy is where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency.
A command-based economy is where political agents directly control what is produced and how it is sold and distributed.
A green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.
The Economy of the United States:
The United States is the world's largest national economy in nominal terms and second largest according to purchasing power parity (PPP), representing 22% of nominal global GDP and 17% of gross world product (GWP).
The United States' GDP was estimated to be $17.914 trillion as of Q2 2015. The U.S. dollar is the currency most used in international transactions and is the world's foremost reserve currency. Several countries use it as their official currency, and in many others it is the de facto currency.
The United States has a mixed economy and has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment.
Its seven largest trading partners are Canada, China, Mexico, Japan, Germany, South Korea, and the United Kingdom.
The US has abundant natural resources, a well-developed infrastructure, and high productivity. It has the world's ninth-highest per capita GDP (nominal) and tenth-highest per capita GDP (PPP) as of 2013.
Americans have the highest average household and employee income among OECD nations, and in 2010 had the fourth highest median household income, down from second highest in 2007. It has been the world's largest national economy (not including colonial empires) since at least the 1890s.
The U.S. is the world's largest producer of oil and natural gas.
It is one of the largest trading nations in the world as well as the world's second largest manufacturer, representing a fifth of the global manufacturing output. The US not only has the largest internal market for goods, but also dominates the trade in services. US total trade amounted to $4.93T in 2012. Of the world's 500 largest companies, 128 are headquartered in the US.
The United States has one of the world's largest and most influential financial markets. The New York Stock Exchange is by far the world's largest stock exchange by market capitalization. Foreign investments made in the US total almost $2.4 trillion, while American investments in foreign countries total over $3.3 trillion.
The economy of the U.S. leads in international ranking on venture capital and Global Research and Development funding. Consumer spending comprises 71% of the US economy in 2013.
The United States has the largest consumer market in the world, with a household final consumption expenditure five times larger than Japan's. The labor market has attracted immigrants from all over the world and its net migration rate is among the highest in the world. The U.S. is one of the top-performing economies in studies such as the Ease of Doing Business Index, the Global Competitiveness Report, and others.
The US economy went through an economic downturn following the financial crisis of 2007–08, with output as late as 2013 still below potential according to the Congressional Budget Office.
The economy, however, began to recover in the second half of 2009, and as of November 2015, unemployment had declined from a high of 10% to 5%. In December 2014, public debt was slightly more than 100% of GDP. Domestic financial assets totaled $131 trillion and domestic financial liabilities totaled $106 trillion.
The World Economy:
The world economy or global economy is the economy of the world, considered as the international exchange of goods and services that is expressed in monetary units of account (money).
In some contexts, the two terms are distinguished: the "international" or "global economy" being measured separately and distinguished from national economies while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use, and exchange the definitions, representations, models, and valuations of the world economy vary widely. It is inseparable from the geography and ecology of Earth.
It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.
However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy, since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.
World share of GDP (PPP) (World Bank, 2011).
Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars or euros. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.13 billion people have most of their economic activity reflected in these valuations.
As of 2015, the following 13 countries or regions have reached an economy of at least US$2 trillion by GDP in nominal or PPP terms:
Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency, but monetary transactions are only a small part of the economic domain.
Economic activity is spurred by production which uses natural resources, labor, and capital. It has changed over time due to
- technology (automation, accelerator of process, reduction of cost functions),
- innovation (new products, services, processes, new markets, expands markets, diversification of markets, niche markets, increases revenue functions) such as that which produces intellectual property,
- and changes in industrial relations (for example, child labor being replaced in some parts of the world with universal access to education).
A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors.
These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
A market-based economy is where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency.
A command-based economy is where political agents directly control what is produced and how it is sold and distributed.
A green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.
The Economy of the United States:
The United States is the world's largest national economy in nominal terms and second largest according to purchasing power parity (PPP), representing 22% of nominal global GDP and 17% of gross world product (GWP).
The United States' GDP was estimated to be $17.914 trillion as of Q2 2015. The U.S. dollar is the currency most used in international transactions and is the world's foremost reserve currency. Several countries use it as their official currency, and in many others it is the de facto currency.
The United States has a mixed economy and has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment.
Its seven largest trading partners are Canada, China, Mexico, Japan, Germany, South Korea, and the United Kingdom.
The US has abundant natural resources, a well-developed infrastructure, and high productivity. It has the world's ninth-highest per capita GDP (nominal) and tenth-highest per capita GDP (PPP) as of 2013.
Americans have the highest average household and employee income among OECD nations, and in 2010 had the fourth highest median household income, down from second highest in 2007. It has been the world's largest national economy (not including colonial empires) since at least the 1890s.
The U.S. is the world's largest producer of oil and natural gas.
It is one of the largest trading nations in the world as well as the world's second largest manufacturer, representing a fifth of the global manufacturing output. The US not only has the largest internal market for goods, but also dominates the trade in services. US total trade amounted to $4.93T in 2012. Of the world's 500 largest companies, 128 are headquartered in the US.
The United States has one of the world's largest and most influential financial markets. The New York Stock Exchange is by far the world's largest stock exchange by market capitalization. Foreign investments made in the US total almost $2.4 trillion, while American investments in foreign countries total over $3.3 trillion.
The economy of the U.S. leads in international ranking on venture capital and Global Research and Development funding. Consumer spending comprises 71% of the US economy in 2013.
The United States has the largest consumer market in the world, with a household final consumption expenditure five times larger than Japan's. The labor market has attracted immigrants from all over the world and its net migration rate is among the highest in the world. The U.S. is one of the top-performing economies in studies such as the Ease of Doing Business Index, the Global Competitiveness Report, and others.
The US economy went through an economic downturn following the financial crisis of 2007–08, with output as late as 2013 still below potential according to the Congressional Budget Office.
The economy, however, began to recover in the second half of 2009, and as of November 2015, unemployment had declined from a high of 10% to 5%. In December 2014, public debt was slightly more than 100% of GDP. Domestic financial assets totaled $131 trillion and domestic financial liabilities totaled $106 trillion.
The World Economy:
The world economy or global economy is the economy of the world, considered as the international exchange of goods and services that is expressed in monetary units of account (money).
In some contexts, the two terms are distinguished: the "international" or "global economy" being measured separately and distinguished from national economies while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use, and exchange the definitions, representations, models, and valuations of the world economy vary widely. It is inseparable from the geography and ecology of Earth.
It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.
However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy, since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.
World share of GDP (PPP) (World Bank, 2011).
Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars or euros. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.13 billion people have most of their economic activity reflected in these valuations.
As of 2015, the following 13 countries or regions have reached an economy of at least US$2 trillion by GDP in nominal or PPP terms:
- Brazil,
- China,
- France,
- Germany,
- India,
- Indonesia,
- Italy,
- Japan,
- Mexico,
- Russia,
- the United Kingdom,
- the United States,
- and the European Union.
Economics and Monetary Policy of the United States, including the President's Council of Economic Advisors
YouTube Video: Alan Greenspan on Brexit, U.S. Economy, and Inflation (Full Interview)
Pictured: LEFT: Study of Economics, CENTER: Monetary Policy of the United States, RIGHT: Seal of President's Council of Economic Advisors
Economics is a social science concerned with the factors that determine the production, distribution, and consumption of goods and services.
Economics focuses on the behavior and interactions of economic agents and how economies work. Consistent with this focus, primary textbooks often distinguish between microeconomics and macroeconomics.
Microeconomics examines the behavior of basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers.
Macroeconomics analyses the entire economy (meaning aggregated production, consumption, savings, and investment) and issues affecting it, including unemployment of resources (labor, capital, and land), inflation, economic growth, and the public policies that address these issues (monetary, fiscal, and other policies).
Other broad distinctions within economics include those between positive economics, describing "what is", and normative economics, advocating "what ought to be"; between economic theory and applied economics; between rational and behavioral economics; and between mainstream economics and heterodox economics.
Besides the traditional concern in production, distribution, and consumption in an economy, economic analysis may be applied throughout society, as in business, finance, health care, and government.
Economic analyses may also be applied to such diverse subjects as:
Education, for example, requires time, effort, and expenses, plus the foregone income and experience, yet these losses can be weighted against future benefits education may bring to the agent or the economy.
At the turn of the 21st century, the expanding domain of economics in the social sciences has been described as economic imperialism. The ultimate goal of economics is to improve the living conditions of people in their everyday life.
For more about Economics, click here.
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Monetary policy of the United States:
Monetary policy concerns the actions of a central bank or other regulatory authorities that determine the size and rate of growth of the money supply.
In the United States, the Federal Reserve is in charge of monetary policy, and implements it primarily by performing operations that influence short-term interest rates.
Click on any of the following blue hyperlinks for further amplification about Monetary policy of the United States:
President's Council of Economic Advisers
The Council of Economic Advisers (CEA) is an agency within the Executive Office of the President that advises the President of the United States on economic policy. The CEA provides much of the objective empirical research for the White House and prepares the annual Economic Report of the President.
Click on any of the following blue hyperlinks for further amplification:
Economics focuses on the behavior and interactions of economic agents and how economies work. Consistent with this focus, primary textbooks often distinguish between microeconomics and macroeconomics.
Microeconomics examines the behavior of basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers.
Macroeconomics analyses the entire economy (meaning aggregated production, consumption, savings, and investment) and issues affecting it, including unemployment of resources (labor, capital, and land), inflation, economic growth, and the public policies that address these issues (monetary, fiscal, and other policies).
Other broad distinctions within economics include those between positive economics, describing "what is", and normative economics, advocating "what ought to be"; between economic theory and applied economics; between rational and behavioral economics; and between mainstream economics and heterodox economics.
Besides the traditional concern in production, distribution, and consumption in an economy, economic analysis may be applied throughout society, as in business, finance, health care, and government.
Economic analyses may also be applied to such diverse subjects as:
- crime,
- education,
- family,
- law,
- politics,
- religion,
- social institutions,
- war,
- science,
- and the environment.
Education, for example, requires time, effort, and expenses, plus the foregone income and experience, yet these losses can be weighted against future benefits education may bring to the agent or the economy.
At the turn of the 21st century, the expanding domain of economics in the social sciences has been described as economic imperialism. The ultimate goal of economics is to improve the living conditions of people in their everyday life.
For more about Economics, click here.
___________________________________________________________________________
Monetary policy of the United States:
Monetary policy concerns the actions of a central bank or other regulatory authorities that determine the size and rate of growth of the money supply.
In the United States, the Federal Reserve is in charge of monetary policy, and implements it primarily by performing operations that influence short-term interest rates.
Click on any of the following blue hyperlinks for further amplification about Monetary policy of the United States:
- Money supply
- Structure of modern US institutions
- Federal Reserve
U.S. Treasury
Private commercial banks
- Federal Reserve
- Money creation
- Significant effects
- Uncertainties
- Opinions of the Federal Reserve
- See also:
President's Council of Economic Advisers
The Council of Economic Advisers (CEA) is an agency within the Executive Office of the President that advises the President of the United States on economic policy. The CEA provides much of the objective empirical research for the White House and prepares the annual Economic Report of the President.
Click on any of the following blue hyperlinks for further amplification:
Economic History of the United States (Since 1950)
YouTube Video: The United States in 1950 (A Simpler Time?)
Pictured: TOP: Chart of Consumer Price Index (CPI) Composition.
BOTTOM: The economy of the United States as a measure of growth based on the Gross Domestic Product (GDP)
The Economic History of the United States is about characteristics of and important developments in the U.S. economy. The emphasis is on economic performance and how it was affected by new technologies, the change of size in economic sectors and the effects of legislation and government policy. Specialized teams and business history are covered in American business history.
The period from the end of World War II to the early 1970s was a golden era of economic growth. $200 billion in war bonds matured, and the G.I. Bill financed a well-educated work force.
The middle class swelled, as did GDP and productivity. This growth was distributed fairly evenly across the economic classes, which some attribute to the strength of labor unions in this period—labor union membership peaked historically in the U.S. during the 1950s, in the midst of this massive economic growth.
Much of the growth came from the movement of low income farm workers into better paying jobs in the towns and cities—a process largely completed by 1960. Congress created the Council of Economic Advisors, to promote high employment, high profits and low inflation.
The Eisenhower administration (1953–1961) supported an activist contracyclical approach that helped to establish Keynesianism as a bipartisan economic policy for the nation.
Especially important in formulating the CEA response to the recession—accelerating public works programs, easing credit, and reducing taxes—were Arthur F. Burns and Neil H. Jacoby. "I am now a Keynesian in economics", proclaimed Republican President Richard Nixon in 1969.
Although this period brought economic expansion to the country as a whole, it was not recession proof. The recessions of 1953, 1958, and 1960 saw a drastic decline in GDP.
The "Baby Boom" saw a dramatic increase in fertility in the period 1942–1957; it was caused by delayed marriages and childbearing during depression years, a surge in prosperity, a demand for suburban single-family homes (as opposed to inner city apartments) and new optimism about the future. The boom crested about 1957, then slowly declined
Click on any of the following for major developments impacting the United States since 1950:
The period from the end of World War II to the early 1970s was a golden era of economic growth. $200 billion in war bonds matured, and the G.I. Bill financed a well-educated work force.
The middle class swelled, as did GDP and productivity. This growth was distributed fairly evenly across the economic classes, which some attribute to the strength of labor unions in this period—labor union membership peaked historically in the U.S. during the 1950s, in the midst of this massive economic growth.
Much of the growth came from the movement of low income farm workers into better paying jobs in the towns and cities—a process largely completed by 1960. Congress created the Council of Economic Advisors, to promote high employment, high profits and low inflation.
The Eisenhower administration (1953–1961) supported an activist contracyclical approach that helped to establish Keynesianism as a bipartisan economic policy for the nation.
Especially important in formulating the CEA response to the recession—accelerating public works programs, easing credit, and reducing taxes—were Arthur F. Burns and Neil H. Jacoby. "I am now a Keynesian in economics", proclaimed Republican President Richard Nixon in 1969.
Although this period brought economic expansion to the country as a whole, it was not recession proof. The recessions of 1953, 1958, and 1960 saw a drastic decline in GDP.
The "Baby Boom" saw a dramatic increase in fertility in the period 1942–1957; it was caused by delayed marriages and childbearing during depression years, a surge in prosperity, a demand for suburban single-family homes (as opposed to inner city apartments) and new optimism about the future. The boom crested about 1957, then slowly declined
Click on any of the following for major developments impacting the United States since 1950:
- Agriculture
- Aircraft and air transportation industries
- Interstate highway system
- Mainframe computers
- Liberal programs
- Military and space spending
Congressional Budget Office (CBO)
YouTube Video: Introduction to the Congressional Budget Office
Pictured below: An Analysis of the President’s 2018 Budget
The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress.
Inspired by California's Legislative Analyst's Office that manages the state budget in a strictly nonpartisan fashion, the CBO was created as a nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974.
There is a consensus among economists that "the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."
Mission:
The Congressional Budget Office is nonpartisan, and produces "independent analyses of budgetary and economic issues to support the Congressional budget process." Each year, the agency releases reports and cost estimates for proposed legislation, without issuing any policy recommendations.
With respect to estimating spending for Congress, the Congressional Budget Office serves a purpose parallel to that of the Joint Committee on Taxation for estimating revenue for Congress, the Department of the Treasury for estimating revenues for the Executive branch. This includes projections on the effect on national debt and cost estimates for legislation.
Operations:
Section 202(e) of the Budget Act requires the CBO to submit periodic reports about fiscal policy to the House and Senate budget committees to provide baseline projections of the federal budget. This is currently done by preparation of an annual Economic and Budget Outlook plus a mid-year update.
The agency also each year issues An Analysis of the President's Budgetary Proposals for the upcoming fiscal year per a standing request of the Senate Committee on Appropriations.
These three series are designated essential titles distributed to Federal Depository Libraries and are available for purchase from the Government Publishing Office. The CBO often provides testimony in response to requests from various Congressional committees and issues letters responding to queries made by members of Congress.
Departmental Divisions:
The Congressional Budget Office is divided into eight divisions:
Click on the following blue hyperlinks for more about The Congressional Budget Office (CBO):
Inspired by California's Legislative Analyst's Office that manages the state budget in a strictly nonpartisan fashion, the CBO was created as a nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974.
There is a consensus among economists that "the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."
Mission:
The Congressional Budget Office is nonpartisan, and produces "independent analyses of budgetary and economic issues to support the Congressional budget process." Each year, the agency releases reports and cost estimates for proposed legislation, without issuing any policy recommendations.
With respect to estimating spending for Congress, the Congressional Budget Office serves a purpose parallel to that of the Joint Committee on Taxation for estimating revenue for Congress, the Department of the Treasury for estimating revenues for the Executive branch. This includes projections on the effect on national debt and cost estimates for legislation.
Operations:
Section 202(e) of the Budget Act requires the CBO to submit periodic reports about fiscal policy to the House and Senate budget committees to provide baseline projections of the federal budget. This is currently done by preparation of an annual Economic and Budget Outlook plus a mid-year update.
The agency also each year issues An Analysis of the President's Budgetary Proposals for the upcoming fiscal year per a standing request of the Senate Committee on Appropriations.
These three series are designated essential titles distributed to Federal Depository Libraries and are available for purchase from the Government Publishing Office. The CBO often provides testimony in response to requests from various Congressional committees and issues letters responding to queries made by members of Congress.
Departmental Divisions:
The Congressional Budget Office is divided into eight divisions:
- Budget Analysis
- Financial Analysis
- Health, Retirement, and Long-Term Analysis
- Macroeconomic Analysis
- Management, Business, and Information Services
- Microeconomic Studies
- National Security
- Tax Analysis
Click on the following blue hyperlinks for more about The Congressional Budget Office (CBO):
Causes of Income Inequality in the United States and their impact on America's Shrinking Middle Class
YouTube Video; Is America Dreaming?: Understanding Social Mobility (by the Brookings Institution)
Pictured Below:
TOP CHART: “Annual U.S. Income share of the Top 1% Income Earners”
BOTTOM CHART: Distribution of US federal taxes from 1979 to 2013, based on CBO Estimates. (Courtesy of US Congressional Budget Office, publication 44604)
YouTube Video; Is America Dreaming?: Understanding Social Mobility (by the Brookings Institution)
Pictured Below:
TOP CHART: “Annual U.S. Income share of the Top 1% Income Earners”
BOTTOM CHART: Distribution of US federal taxes from 1979 to 2013, based on CBO Estimates. (Courtesy of US Congressional Budget Office, publication 44604)
As Reported By PEW Research Center (12/9/2015): "No longer the majority and falling behind financially"
"After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data..."
Click here for more from the PEW Research Center: "The American Middle Class Is Losing Ground"
Causes of income inequality in the United States describes why changes in the country's income distribution are occurring. This topic is subject to extensive ongoing research, media attention, and political interest, as it involves how the national income of the country is split among its people at various income levels.
Overview:
Income inequality in the United States has grown significantly since the early 1970s, after several decades of stability, and has been the subject of study of many scholars and institutions. The U.S. consistently exhibits higher rates of income inequality than most developed nations, arguably due to the nation's relatively enhanced support of free market capitalism.
According to the CBO and others, "the precise reasons for the [recent] rapid growth in income at the top are not well understood", but "in all likelihood," an "interaction of multiple factors" was involved. "Researchers have offered several potential rationales."[16][19] Some of these rationales conflict, some overlap. They include:
Paul Krugman put several of these factors into context in January 2015: "Competition from emerging-economy exports has surely been a factor depressing wages in wealthier nations, although probably not the dominant force.
More important, soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing...Perhaps more important still, the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen (wage stagnation and income inequality)"
Click on any of the following blue hyperlinks for more about The Causes of Income Inequality:
"After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data..."
Click here for more from the PEW Research Center: "The American Middle Class Is Losing Ground"
Causes of income inequality in the United States describes why changes in the country's income distribution are occurring. This topic is subject to extensive ongoing research, media attention, and political interest, as it involves how the national income of the country is split among its people at various income levels.
Overview:
Income inequality in the United States has grown significantly since the early 1970s, after several decades of stability, and has been the subject of study of many scholars and institutions. The U.S. consistently exhibits higher rates of income inequality than most developed nations, arguably due to the nation's relatively enhanced support of free market capitalism.
According to the CBO and others, "the precise reasons for the [recent] rapid growth in income at the top are not well understood", but "in all likelihood," an "interaction of multiple factors" was involved. "Researchers have offered several potential rationales."[16][19] Some of these rationales conflict, some overlap. They include:
- the globalization hypothesis – low skilled American workers have been losing ground in the face of competition from low-wage workers in Asia and other "emerging" economies;
- skill-biased technological change – the rapid pace of progress in information technology has increased the demand for the highly skilled and educated so that income distribution favored brains rather than brawn;
- the superstar hypothesis – modern technologies of communication often turn competition into a tournament in which the winner is richly rewarded, while the runners-up get far less than in the past;
- immigration of less-educated workers – relatively high levels of immigration of low skilled workers since 1965 may have reduced wages for American-born high school dropouts;
- changing institutions and norms – Unions were a balancing force, helping ensure wages kept up with productivity and that neither executives nor shareholders were unduly rewarded. Further, societal norms placed constraints on executive pay. This changed as union power declined (the share of unionized workers fell significantly during the Great Divergence, from over 30% to around 12%) and CEO pay skyrocketed (rising from around 40 times the average workers pay in the 1970s to over 350 times in the early 2000s).
- policy, politics and race – movement conservatives increased their influence over the Republican Party beginning in the 1970s, moving it politically rightward. Combined with the Party's expanded political power (enabled by a shift of southern white Democrats to the Republican Party following the passage of Civil Rights legislation in the 1960s), this resulted in more regressive tax laws, anti-labor policies, and further limited expansion of the welfare state relative to other developed nations (e.g., the unique absence of universal healthcare).
Paul Krugman put several of these factors into context in January 2015: "Competition from emerging-economy exports has surely been a factor depressing wages in wealthier nations, although probably not the dominant force.
More important, soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing...Perhaps more important still, the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen (wage stagnation and income inequality)"
Click on any of the following blue hyperlinks for more about The Causes of Income Inequality:
Income Inequality in the United States
YouTube Video: U.S. Income Equality Keeps Getting Worse*
*-CNN article excerpted in text below Picture:
From CNN, 12/22/16 by Heather Long
"Inequality in America is getting uglier."
"The gap between the "haves" and "have nots" is widening, according to the latest data out this week.
The rich are money-making machines. Today, the top mega wealthy -- the top 1% -- earn an average of $1.3 million a year. It's more than three times as much as the 1980s, when the rich "only" made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.
Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn't changed in over three decades.
As if that's not depressing enough, living the American Dream is also getting harder to do.
Millennials, born in the 1980s, only have a 50% likelihood -- a coin toss chance -- of earning more money than their parents did, according to new research released this month from the Equality of Opportunity Project.
It wasn't always this way. In the 1940s, almost everyone in America grew up to be better off financially than their parents. While money isn't the only definition of success, more wealth typically leads to bigger houses, grander vacations, fancier cars and more opportunities to advance.
Children's prospects of achieving the 'American Dream' of earning more than their parents have fallen from 90% to 50% over the past half century," the researchers wrote in their report." : Click here for fully article.
___________________________________________________________________________
Income inequality in the United States has increased significantly since the 1970s after several decades of stability, meaning the share of the nation's income received by higher income households has increased.
This trend is evident with income measured both before taxes (market income) as well as after taxes and transfer payments. Income inequality has fluctuated considerably since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a 30-year period of relatively lower inequality between 1950–1980.
Measured for all households, U.S. income inequality is comparable to other developed countries before taxes and transfers, but is among the highest after taxes and transfers, meaning the U.S. shifts relatively less income from higher income households to lower income households.
Measured for working-age households, market income inequality is comparatively high (rather than moderate) and the level of redistribution is moderate (not low). These comparisons indicate Americans shift from reliance on market income to reliance on income transfers later in life and less than households in other developed countries do.
The U.S. ranks around the 30th percentile in income inequality globally, meaning 70% of countries have a more equal income distribution. U.S. federal tax and transfer policies are progressive and therefore reduce income inequality measured after taxes and transfers. Tax and transfer policies together reduced income inequality slightly more in 2011 than in 1979.
While there is strong evidence that it has increased since the 1970s, there is active debate in the United States regarding the appropriate measurement, causes, effects and solutions to income inequality.
The two major political parties have different approaches to the issue, with Democrats historically emphasizing that economic growth should result in shared prosperity (i.e., a pro-labor argument advocating income redistribution), while Republicans tend to downplay the validity or feasibility of positively influencing the issue (i.e., a pro-capital argument against redistribution).
Overview:
U.S. income inequality has grown significantly since the early 1970s, after several decades of stability, and has been the subject of study of many scholars and institutions. The U.S. consistently exhibits higher rates of income inequality than most developed nations due to the nation's enhanced support of free market capitalism and less progressive spending on social services.
The top 1% of income earners received approximately 20% of the pre-tax income in 2013, versus approximately 10% from 1950 to 1980. The top 1% is not homogeneous, with the very top income households pulling away from others in the top 1%. For example, the top 0.1% of households received approximately 10% of the pre-tax income in 2013, versus approximately 3–4% between 1951–1981.
According to IRS data, adjusted gross income (AGI) of approximately $430,000 was required to be in the top 1% in 2013.
Most of the growth in income inequality has been between the middle class and top earners, with the disparity widening the further one goes up in the income distribution. The bottom 50% earned 20% of the nation's pre-tax income in 1979; this fell steadily to 14% by 2007 and 13% by 2014. Income for the middle 40% group, a proxy for the middle class, fell from 45% in 1979 to 41% in both 2007 and 2014.
To put this change into perspective, if the US had the same income distribution it had in 1979, each family in the bottom 80% of the income distribution would have $11,000 more per year in income on average, or $916 per month. Half of the U.S. population lives in poverty or is low-income, according to U.S. Census data.
The trend of rising income inequality is also apparent after taxes and transfers. A 2011 study by the CBO found that the top earning 1 percent of households increased their income by about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution.
U.S. federal tax and transfer policies are progressive and therefore substantially reduce income inequality measured after taxes and transfers. They became moderately less progressive between 1979 and 2007, but slightly more progressive measured between 1979 and 2011. Income transfers had a greater impact on reducing inequality than taxes from 1979 to 2011.
Americans are not generally aware of the extent of inequality or recent trends. There is a direct relationship between actual income inequality and the public's views about the need to address the issue in most developed countries, but not in the U.S., where income inequality is worse but the concern is lower.
The U.S. was ranked the 6th worst among 173 countries (4th percentile) on income equality measured by the Gini index.
There is significant and ongoing debate as to the causes, economic effects, and solutions regarding income inequality. While before-tax income inequality is subject to market factors (e.g., globalization, trade policy, labor policy, and international competition), after-tax income inequality can be directly affected by tax and transfer policy. U.S. income inequality is comparable to other developed nations before taxes and transfers, but is among the worst after taxes and transfers. Income inequality may contribute to slower economic growth, reduced income mobility, higher levels of household debt, and greater risk of financial crises and deflation.
Labor (workers) and capital (owners) have always battled over the share of the economic pie each obtains. The influence of the labor movement has waned in the U.S. since the 1960s along with union participation and more pro-capital laws. The share of total worker compensation has declined from 58% of national income (GDP) in 1970 to nearly 53% in 2013, contributing to income inequality. This has led to concerns that the economy has shifted too far in favor of capital, via a form of corporatism, corpocracy or neoliberalism.
Although some have spoken out in favor of moderate inequality as a form of incentive, others have warned against the current high levels of inequality, including Yale Nobel prize for economics winner Robert J. Shiller, (who called rising economic inequality "the most important problem that we are facing now today"), former Federal Reserve Board chairman Alan Greenspan, ("This is not the type of thing which a democratic society – a capitalist democratic society – can really accept without addressing"), and President Barack Obama (who referred to the widening income gap as the "defining challenge of our time").
after several decades of stability, and has been the subject of study of many scholars and institutions.
For more about Income Inequality in the United States, click on any of the following blue hyperlinks:
"Inequality in America is getting uglier."
"The gap between the "haves" and "have nots" is widening, according to the latest data out this week.
The rich are money-making machines. Today, the top mega wealthy -- the top 1% -- earn an average of $1.3 million a year. It's more than three times as much as the 1980s, when the rich "only" made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.
Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn't changed in over three decades.
As if that's not depressing enough, living the American Dream is also getting harder to do.
Millennials, born in the 1980s, only have a 50% likelihood -- a coin toss chance -- of earning more money than their parents did, according to new research released this month from the Equality of Opportunity Project.
It wasn't always this way. In the 1940s, almost everyone in America grew up to be better off financially than their parents. While money isn't the only definition of success, more wealth typically leads to bigger houses, grander vacations, fancier cars and more opportunities to advance.
Children's prospects of achieving the 'American Dream' of earning more than their parents have fallen from 90% to 50% over the past half century," the researchers wrote in their report." : Click here for fully article.
___________________________________________________________________________
Income inequality in the United States has increased significantly since the 1970s after several decades of stability, meaning the share of the nation's income received by higher income households has increased.
This trend is evident with income measured both before taxes (market income) as well as after taxes and transfer payments. Income inequality has fluctuated considerably since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a 30-year period of relatively lower inequality between 1950–1980.
Measured for all households, U.S. income inequality is comparable to other developed countries before taxes and transfers, but is among the highest after taxes and transfers, meaning the U.S. shifts relatively less income from higher income households to lower income households.
Measured for working-age households, market income inequality is comparatively high (rather than moderate) and the level of redistribution is moderate (not low). These comparisons indicate Americans shift from reliance on market income to reliance on income transfers later in life and less than households in other developed countries do.
The U.S. ranks around the 30th percentile in income inequality globally, meaning 70% of countries have a more equal income distribution. U.S. federal tax and transfer policies are progressive and therefore reduce income inequality measured after taxes and transfers. Tax and transfer policies together reduced income inequality slightly more in 2011 than in 1979.
While there is strong evidence that it has increased since the 1970s, there is active debate in the United States regarding the appropriate measurement, causes, effects and solutions to income inequality.
The two major political parties have different approaches to the issue, with Democrats historically emphasizing that economic growth should result in shared prosperity (i.e., a pro-labor argument advocating income redistribution), while Republicans tend to downplay the validity or feasibility of positively influencing the issue (i.e., a pro-capital argument against redistribution).
Overview:
U.S. income inequality has grown significantly since the early 1970s, after several decades of stability, and has been the subject of study of many scholars and institutions. The U.S. consistently exhibits higher rates of income inequality than most developed nations due to the nation's enhanced support of free market capitalism and less progressive spending on social services.
The top 1% of income earners received approximately 20% of the pre-tax income in 2013, versus approximately 10% from 1950 to 1980. The top 1% is not homogeneous, with the very top income households pulling away from others in the top 1%. For example, the top 0.1% of households received approximately 10% of the pre-tax income in 2013, versus approximately 3–4% between 1951–1981.
According to IRS data, adjusted gross income (AGI) of approximately $430,000 was required to be in the top 1% in 2013.
Most of the growth in income inequality has been between the middle class and top earners, with the disparity widening the further one goes up in the income distribution. The bottom 50% earned 20% of the nation's pre-tax income in 1979; this fell steadily to 14% by 2007 and 13% by 2014. Income for the middle 40% group, a proxy for the middle class, fell from 45% in 1979 to 41% in both 2007 and 2014.
To put this change into perspective, if the US had the same income distribution it had in 1979, each family in the bottom 80% of the income distribution would have $11,000 more per year in income on average, or $916 per month. Half of the U.S. population lives in poverty or is low-income, according to U.S. Census data.
The trend of rising income inequality is also apparent after taxes and transfers. A 2011 study by the CBO found that the top earning 1 percent of households increased their income by about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution.
U.S. federal tax and transfer policies are progressive and therefore substantially reduce income inequality measured after taxes and transfers. They became moderately less progressive between 1979 and 2007, but slightly more progressive measured between 1979 and 2011. Income transfers had a greater impact on reducing inequality than taxes from 1979 to 2011.
Americans are not generally aware of the extent of inequality or recent trends. There is a direct relationship between actual income inequality and the public's views about the need to address the issue in most developed countries, but not in the U.S., where income inequality is worse but the concern is lower.
The U.S. was ranked the 6th worst among 173 countries (4th percentile) on income equality measured by the Gini index.
There is significant and ongoing debate as to the causes, economic effects, and solutions regarding income inequality. While before-tax income inequality is subject to market factors (e.g., globalization, trade policy, labor policy, and international competition), after-tax income inequality can be directly affected by tax and transfer policy. U.S. income inequality is comparable to other developed nations before taxes and transfers, but is among the worst after taxes and transfers. Income inequality may contribute to slower economic growth, reduced income mobility, higher levels of household debt, and greater risk of financial crises and deflation.
Labor (workers) and capital (owners) have always battled over the share of the economic pie each obtains. The influence of the labor movement has waned in the U.S. since the 1960s along with union participation and more pro-capital laws. The share of total worker compensation has declined from 58% of national income (GDP) in 1970 to nearly 53% in 2013, contributing to income inequality. This has led to concerns that the economy has shifted too far in favor of capital, via a form of corporatism, corpocracy or neoliberalism.
Although some have spoken out in favor of moderate inequality as a form of incentive, others have warned against the current high levels of inequality, including Yale Nobel prize for economics winner Robert J. Shiller, (who called rising economic inequality "the most important problem that we are facing now today"), former Federal Reserve Board chairman Alan Greenspan, ("This is not the type of thing which a democratic society – a capitalist democratic society – can really accept without addressing"), and President Barack Obama (who referred to the widening income gap as the "defining challenge of our time").
after several decades of stability, and has been the subject of study of many scholars and institutions.
For more about Income Inequality in the United States, click on any of the following blue hyperlinks:
- History
- Causes
- Effects: Economic
- Effects: Socio-economic mobility
- Effects on democracy and society
- Public attitudes
- States and cities
- International comparisons
- Policy responses
- Overview
- Resources available to children
- Affordable higher education
- Public welfare and infrastructure spending
- Taxes on the wealthy
- Reduce tax expenditures
- Corporate tax reform
- Minimum wages
- Maximum wage implementation
- Subsidies and income guarantees
- Rent-seeking limits
- Economic democracy
- Monetary policy
- Measurement approaches
- Wealth inequality
- See also:
- American Dream
- Economic inequality
- Economic mobility
- Economy of the United States
- Educational attainment in the United States
- High-net-worth individual
- Homelessness in the United States
- Inequality for All – 2013 documentary film presented by Robert Reich
- Income inequality metrics
- Legatum Prosperity Index
- List of countries by income equality
- List of countries by inequality-adjusted HDI
- Median income per household member
- Middle-class squeeze
- Occupy Movement
- Racial inequality in the United States
- Second Bill of Rights
- Socio-economic mobility in the United States
- The Divide: American Injustice in the Age of the Wealth Gap – book
- The Spirit Level: Why More Equal Societies Almost Always Do Better – book
- Social justice
- Tax policy and economic inequality in the United States
Widening Gap in Income between the wealthiest 1% and the rest of Americans
YouTube Video by Robert Reich*: "Inequality for All"
* -- Robert Reich, Chancellor's Professor of Public Policy, University of California, Berkeley; Former Secretary of Labor
Pictured: CBO Chart, U.S. Holdings of Family Wealth 1989 to 2013. The top 10% of families held 76% of the wealth in 2013, while the bottom 50% of families held 1%. Inequality worsened from 1989 to 2013.
Wealth inequality in the United States (also known as the wealth gap) is the unequal distribution of assets among residents of the United States.
Wealth includes the values of homes, automobiles, personal valuables, businesses, savings, and investments.
However, according to the federal reserve, "For most households, pensions and Social Security are the most important sources of income during retirement, and the promised benefit stream constitutes a sizable fraction of household wealth" and "including pensions and Social Security in net worth makes the distribution more even".
Just prior to President Obama's 2014 State of the Union Address, media reported that the top wealthiest 1% possess 40% of the nation’s wealth; the bottom 80% own 7%; similarly, but later, the media reported, the "richest 1 percent in the United States now own more additional income than the bottom 90 percent".
The gap between the top 10% and the middle class is over 1,000%; that increases another 1,000% for the top 1%. The average employee "needs to work more than a month to earn what the CEO earns in one hour." Although different from income inequality, the two are related.
In Inequality for All—a 2013 documentary with Robert Reich in which he argued that income inequality is the defining issue for the United States—Reich states that 95% of economic gains went to the top 1% net worth (HNWI) since 2009 when the recovery allegedly started.
More recently, in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race".
A 2011 study found that US citizens across the political spectrum dramatically underestimate the current US wealth inequality and would prefer a far more egalitarian distribution of wealth.
Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income it comprises the family's total opportunity "to secure a desired stature and standard of living, or pass their class status along to one's children".
Moreover, "wealth provides for both short- and long-term financial security, bestows social prestige, and contributes to political power, and can be used to produce more wealth."
Hence, wealth possesses a psychological element that awards people the feeling of agency, or the ability to act. The accumulation of wealth grants more options and eliminates restrictions about how one can live life. Dennis Gilbert asserts that the standard of living of the working and middle classes is dependent upon income and wages, while the rich tend to rely on wealth, distinguishing them from the vast majority of Americans.
A September 2014 study by Harvard Business School declared that the growing disparity between the very wealthy and the lower and middle classes is no longer sustainable.
Click on any of the following blue hyperlinks for more about Wealth Inequality in the United States:
Wealth includes the values of homes, automobiles, personal valuables, businesses, savings, and investments.
However, according to the federal reserve, "For most households, pensions and Social Security are the most important sources of income during retirement, and the promised benefit stream constitutes a sizable fraction of household wealth" and "including pensions and Social Security in net worth makes the distribution more even".
Just prior to President Obama's 2014 State of the Union Address, media reported that the top wealthiest 1% possess 40% of the nation’s wealth; the bottom 80% own 7%; similarly, but later, the media reported, the "richest 1 percent in the United States now own more additional income than the bottom 90 percent".
The gap between the top 10% and the middle class is over 1,000%; that increases another 1,000% for the top 1%. The average employee "needs to work more than a month to earn what the CEO earns in one hour." Although different from income inequality, the two are related.
In Inequality for All—a 2013 documentary with Robert Reich in which he argued that income inequality is the defining issue for the United States—Reich states that 95% of economic gains went to the top 1% net worth (HNWI) since 2009 when the recovery allegedly started.
More recently, in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as "half the human race".
A 2011 study found that US citizens across the political spectrum dramatically underestimate the current US wealth inequality and would prefer a far more egalitarian distribution of wealth.
Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income it comprises the family's total opportunity "to secure a desired stature and standard of living, or pass their class status along to one's children".
Moreover, "wealth provides for both short- and long-term financial security, bestows social prestige, and contributes to political power, and can be used to produce more wealth."
Hence, wealth possesses a psychological element that awards people the feeling of agency, or the ability to act. The accumulation of wealth grants more options and eliminates restrictions about how one can live life. Dennis Gilbert asserts that the standard of living of the working and middle classes is dependent upon income and wages, while the rich tend to rely on wealth, distinguishing them from the vast majority of Americans.
A September 2014 study by Harvard Business School declared that the growing disparity between the very wealthy and the lower and middle classes is no longer sustainable.
Click on any of the following blue hyperlinks for more about Wealth Inequality in the United States:
- Statistics
- Wealth and income
- Wealth inequality and child poverty
- Causes of wealth inequality
- Racial disparities
- Effect on democracy
- See also:
- Affluence in the United States
- Citizens United v. Federal Election Commission
- Donor Class
- Monetary policy
- Net worth
- "Occupy" protests
- Occupy Wall Street
- Oligarchy
- Plutocracy
- Pareto principle
- Power elite
- Redistribution of wealth
- Tax Policy and Economic Inequality in the United States
- The Divide: American Injustice in the Age of the Wealth Gap
- Wealth concentration
- Wealth in the United States
- We are the 99%
Economic Globalization
YouTube: The Link Between Globalization and Political Instability
(Video by Stanford Graduate School of Business)
Pictured below: The Impact of Globalization On Economic Growth (See below)
The Impact of Globalization On Economic Growth by The Balance
Globalization has impacted nearly every aspect of modern life. While some U.S. citizens may not be able to locate Beijing, China on a map, they certainly purchase an overwhelming number of goods that were manufactured there.
According to a 2010 Federal Reserve Bank of San Francisco report, approximately 35.6 percent of all clothing and shoes sold in the United States were actually manufactured in China, compared to just 3.4 percent made domestically. Below is a look beyond the everyday implications of globalization and towards the economic implications that impact international investors.
Globalization Benefits World Economies:
Most economists agree that globalization provides a net benefit to individual economies around the world, by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world.
However, the general public tends to assume that the costs associated with globalization outweigh the benefits, especially in the short-term, which has caused problems we’ll explore in the next section on protectionism.
The Milken Institute’s Globalization of the World Economy report highlights many of the benefits associated with globalization while outlining some of the associated risks that governments and investors should consider.
But, in aggregate, there is a consensus among economists that globalization provides a net benefit to nations around the world and therefore should be embraced on the whole by governments and individuals.
Some of the benefits of globalization include:
Some of the risks of globalization include:
Tariffs & Other Forms of Protectionism:
The 2008 economic crisis led many politicians to question the merits of globalization. Since then, global capital flows fell from $11 trillion in 2007 to a third of that figure in 2012. While some of that may be cyclical in nature, many countries implemented tariffs and other forms of protectionism designed to contain risk in their financial systems and make crises less damaging, although this comes at the cost of forgoing the benefits we’ve seen.
In the U.S. and Europe, new banking regulations were introduced that limited capital flows in order to reduce the risk of contagion. Tariffs have also been put in place to protect domestic industries seen as vital, such as the 127% U.S. tariff on Chinese paper clips or Japan’s 778% tariff on imported rice.
In developing countries, these figures are even worse, with Brazil’s tariffs being some four times higher than America’s and three times higher than China’s.
The election of Donald Trump in the United States and the British vote to leave the European Union - known as the 'Brexit' - have also contributed to the anti-globalization movement.
These trends have been driven by anti-immigration sentiments in Europe, although elections occurring in the past year have proven to be largely pro-globalization rather than anti-globalization.
Globalization may be inevitable over the long-run, but there are many bumps along the road in the short-run. These bumps are often spurred by economic crises or some of the negative consequences of globalization, but in the end, the world has always managed to learn that protectionism can make a bad situation worse.
The Bottom Line:
Globalization has impacted nearly every aspect of modern life and continues to be a growing force in the global economy. While there are a few drawbacks to globalization, most economists agree that it's a force that's both unstoppable and net beneficial to the world economy.
There have always been periods of protectionism and nationalism in the past, but globalization continues to be the most widely accepted solution to ensuring consistent economic growth around the world.
[End of Article]
___________________________________________________________________________
Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.
Economic globalization refers to the free movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital.
Whereas globalization is a broad set of processes concerning multiple networks of economic, political, and cultural interchange, contemporary economic globalization is propelled by the rapid growing significance of information in all types of productive activities and marketization, and by developments in science and technology.
Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and labor.
While economic globalization has been expanding since the emergence of trans-national trade, it has grown at an increased rate due to an increase in communication and technological advances under the framework of General Agreement on Tariffs and Trade and World Trade Organization, which made countries gradually cut down trade barriers and open up their current accounts and capital accounts.
This recent boom has been largely supported by developed economies integrating with majority world through foreign direct investment and lowering costs of doing business, the reduction of trade barriers, and in many cases cross border migration
While globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, it also changes the power balance between developing and developed countries and affects the culture of each affected country.
And the shifting location of goods production has caused many jobs to cross borders, requiring some workers in developed countries to change careers.
Click on any of the following blue hyperlinks for more about Economic Globalization:
Globalization has impacted nearly every aspect of modern life. While some U.S. citizens may not be able to locate Beijing, China on a map, they certainly purchase an overwhelming number of goods that were manufactured there.
According to a 2010 Federal Reserve Bank of San Francisco report, approximately 35.6 percent of all clothing and shoes sold in the United States were actually manufactured in China, compared to just 3.4 percent made domestically. Below is a look beyond the everyday implications of globalization and towards the economic implications that impact international investors.
Globalization Benefits World Economies:
Most economists agree that globalization provides a net benefit to individual economies around the world, by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world.
However, the general public tends to assume that the costs associated with globalization outweigh the benefits, especially in the short-term, which has caused problems we’ll explore in the next section on protectionism.
The Milken Institute’s Globalization of the World Economy report highlights many of the benefits associated with globalization while outlining some of the associated risks that governments and investors should consider.
But, in aggregate, there is a consensus among economists that globalization provides a net benefit to nations around the world and therefore should be embraced on the whole by governments and individuals.
Some of the benefits of globalization include:
- Foreign Direct Investment. Foreign direct investment (“FDI”) tends to increase at a much greater rate than the growth in world trade, helping boost technology transfer, industrial restructuring, and the growth of global companies.
- Technological Innovation. Increased competition from globalization helps stimulate new technology development, particularly with the growth in FDI, which helps improve economic output by making processes more efficient.
- Economies of Scale. Globalization enables large companies to realize economies of scale that reduce costs and prices, which in turn supports further economic growth, although this can hurt many small businesses attempting to compete domestically.
Some of the risks of globalization include:
- Interdependence. Globalization leads to the interdependence between nations, which could cause regional or global instabilities if local economic fluctuations end up impacting a large number of countries relying on them.
- National Sovereignty. Some see the rise of nation-states, multinational or global firms and other international organizations as a threat to sovereignty. Ultimately, this could cause some leaders to become nationalistic or xenophobic.
- Equity Distribution. The benefits of globalization can be unfairly skewed towards rich nations or individuals, creating greater inequalities and leading to potential conflicts both nationally and internationally as a result.
Tariffs & Other Forms of Protectionism:
The 2008 economic crisis led many politicians to question the merits of globalization. Since then, global capital flows fell from $11 trillion in 2007 to a third of that figure in 2012. While some of that may be cyclical in nature, many countries implemented tariffs and other forms of protectionism designed to contain risk in their financial systems and make crises less damaging, although this comes at the cost of forgoing the benefits we’ve seen.
In the U.S. and Europe, new banking regulations were introduced that limited capital flows in order to reduce the risk of contagion. Tariffs have also been put in place to protect domestic industries seen as vital, such as the 127% U.S. tariff on Chinese paper clips or Japan’s 778% tariff on imported rice.
In developing countries, these figures are even worse, with Brazil’s tariffs being some four times higher than America’s and three times higher than China’s.
The election of Donald Trump in the United States and the British vote to leave the European Union - known as the 'Brexit' - have also contributed to the anti-globalization movement.
These trends have been driven by anti-immigration sentiments in Europe, although elections occurring in the past year have proven to be largely pro-globalization rather than anti-globalization.
Globalization may be inevitable over the long-run, but there are many bumps along the road in the short-run. These bumps are often spurred by economic crises or some of the negative consequences of globalization, but in the end, the world has always managed to learn that protectionism can make a bad situation worse.
The Bottom Line:
Globalization has impacted nearly every aspect of modern life and continues to be a growing force in the global economy. While there are a few drawbacks to globalization, most economists agree that it's a force that's both unstoppable and net beneficial to the world economy.
There have always been periods of protectionism and nationalism in the past, but globalization continues to be the most widely accepted solution to ensuring consistent economic growth around the world.
[End of Article]
___________________________________________________________________________
Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.
Economic globalization refers to the free movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital.
Whereas globalization is a broad set of processes concerning multiple networks of economic, political, and cultural interchange, contemporary economic globalization is propelled by the rapid growing significance of information in all types of productive activities and marketization, and by developments in science and technology.
Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and labor.
While economic globalization has been expanding since the emergence of trans-national trade, it has grown at an increased rate due to an increase in communication and technological advances under the framework of General Agreement on Tariffs and Trade and World Trade Organization, which made countries gradually cut down trade barriers and open up their current accounts and capital accounts.
This recent boom has been largely supported by developed economies integrating with majority world through foreign direct investment and lowering costs of doing business, the reduction of trade barriers, and in many cases cross border migration
While globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, it also changes the power balance between developing and developed countries and affects the culture of each affected country.
And the shifting location of goods production has caused many jobs to cross borders, requiring some workers in developed countries to change careers.
Click on any of the following blue hyperlinks for more about Economic Globalization:
United States Federal Budget
YouTube Video: New forecast predicts trillion-dollar deficits by CNN
Pictured below:
TOP: Congressional Budget Office's Baseline Budget Projection
CENTER: Federal Government Outlays as Percentage
BOTTOM: Total Deficits or Surpluses
The recent Republican tax cuts and the bipartisan agreement to raise federal spending have done a number on already high budget deficits. CNN's Victor Blackwell explains how the outlook could be even worse than previously thought.
Overview:
The budget document often begins with the President's proposal to Congress recommending funding levels for the next fiscal year, beginning October 1 and ending on September 30 of the year following. The fiscal year refers to the year in which it ends.
However, Congress is the body required by law to pass appropriations annually and to submit funding bills passed by both houses to the President for signature. Congressional decisions are governed by rules and legislation regarding the federal budget process. Budget committees set spending limits for the House and Senate committees and for Appropriations subcommittees, which then approve individual appropriations bills to allocate funding to various federal programs.
If Congress fails to pass an annual budget, then several appropriations bills must be passed as "stop gap" measures. After Congress approves an appropriations bill, it is then sent to the President, who may either sign it into law or veto it. A vetoed bill is sent back to Congress, which can pass it into law with a two-thirds majority in each legislative chamber. Congress may also combine all or some appropriations bills into one omnibus reconciliation bill. In addition, the president may request and the Congress may pass supplemental appropriations bills or emergency supplemental appropriations bills.
Several government agencies provide budget data and analysis. These include the Government Accountability Office (GAO), the Congressional Budget Office (CBO), the Office of Management and Budget (OMB), and the Treasury Department. These agencies have reported that the federal government is facing many important long-run financing challenges, primarily driven by an aging population, rising interest payments, and spending for healthcare programs like Medicare and Medicaid.
During FY2017, the federal government spent $3.98 trillion on a budget or cash basis, up $128 billion or 3.3% vs. FY2016 spending of $3.85 trillion. Major categories of FY 2017 spending included:
Also during FY2017, the federal government collected approximately $3.32 trillion in tax revenue, up $48 billion or 1.5% versus FY2016. Primary receipt categories included individual income taxes ($1,587B or 48% of total receipts), Social Security/Social Insurance taxes ($1,162B or 35%), and corporate taxes ($297B or 9%).
Other revenue types included excise, estate and gift taxes. FY 2017 revenues were 17.3% of gross domestic product (GDP), versus 17.7% in FY 2016. Tax revenues averaged approximately 17.4% GDP over the 1980-2017 period.
The federal budget deficit (i.e., expenses greater than revenues) was $665 billion in FY2017, versus $585 billion in 2016, an increase of $80 billion or 14%. The budget deficit was 3.5% GDP in 2017, versus 3.2% GDP also in 2016. The budget deficit is forecast to rise to $804 billion in FY2018, due significantly to the Tax Cuts and Jobs Act and other spending bills.
President Trump signed the Tax Cuts and Jobs Act into law in December 2017. CBO forecasts that the 2017 Tax Act will increase the sum of budget deficits (debt) by $2.289 trillion over the 2018-2027 decade, or $1.891 trillion after macro-economic feedback. This is in addition to the $10.1 trillion increase forecast under the current policy baseline and existing $20 trillion national debt
Click on any of the following blue hyperlinks for further amplification on the United States Federal Budget:
Overview:
The budget document often begins with the President's proposal to Congress recommending funding levels for the next fiscal year, beginning October 1 and ending on September 30 of the year following. The fiscal year refers to the year in which it ends.
However, Congress is the body required by law to pass appropriations annually and to submit funding bills passed by both houses to the President for signature. Congressional decisions are governed by rules and legislation regarding the federal budget process. Budget committees set spending limits for the House and Senate committees and for Appropriations subcommittees, which then approve individual appropriations bills to allocate funding to various federal programs.
If Congress fails to pass an annual budget, then several appropriations bills must be passed as "stop gap" measures. After Congress approves an appropriations bill, it is then sent to the President, who may either sign it into law or veto it. A vetoed bill is sent back to Congress, which can pass it into law with a two-thirds majority in each legislative chamber. Congress may also combine all or some appropriations bills into one omnibus reconciliation bill. In addition, the president may request and the Congress may pass supplemental appropriations bills or emergency supplemental appropriations bills.
Several government agencies provide budget data and analysis. These include the Government Accountability Office (GAO), the Congressional Budget Office (CBO), the Office of Management and Budget (OMB), and the Treasury Department. These agencies have reported that the federal government is facing many important long-run financing challenges, primarily driven by an aging population, rising interest payments, and spending for healthcare programs like Medicare and Medicaid.
During FY2017, the federal government spent $3.98 trillion on a budget or cash basis, up $128 billion or 3.3% vs. FY2016 spending of $3.85 trillion. Major categories of FY 2017 spending included:
- Healthcare ($1,077B or 27% of spending),
- Social Security ($939B or 24%),
- non-defense discretionary spending used to run federal Departments and Agencies ($610B or 15%),
- the Defense Department ($590B or 15%),
- and interest ($263B or 7%).
Also during FY2017, the federal government collected approximately $3.32 trillion in tax revenue, up $48 billion or 1.5% versus FY2016. Primary receipt categories included individual income taxes ($1,587B or 48% of total receipts), Social Security/Social Insurance taxes ($1,162B or 35%), and corporate taxes ($297B or 9%).
Other revenue types included excise, estate and gift taxes. FY 2017 revenues were 17.3% of gross domestic product (GDP), versus 17.7% in FY 2016. Tax revenues averaged approximately 17.4% GDP over the 1980-2017 period.
The federal budget deficit (i.e., expenses greater than revenues) was $665 billion in FY2017, versus $585 billion in 2016, an increase of $80 billion or 14%. The budget deficit was 3.5% GDP in 2017, versus 3.2% GDP also in 2016. The budget deficit is forecast to rise to $804 billion in FY2018, due significantly to the Tax Cuts and Jobs Act and other spending bills.
President Trump signed the Tax Cuts and Jobs Act into law in December 2017. CBO forecasts that the 2017 Tax Act will increase the sum of budget deficits (debt) by $2.289 trillion over the 2018-2027 decade, or $1.891 trillion after macro-economic feedback. This is in addition to the $10.1 trillion increase forecast under the current policy baseline and existing $20 trillion national debt
Click on any of the following blue hyperlinks for further amplification on the United States Federal Budget:
- Budget principles
- Major receipt categories
- Major expenditure categories
- Understanding deficits and debt
- CBO budget projections
- Contemporary issues and debates
- Public opinion polls
- Proposed deficit reduction
- Total outlays in recent budget submissions
- See also:
- Congressional Budget Office
- The Federal Budget from the White House, OMB
- Budget of the United States Government and various supplements from 1923 to the present.
- Federal Budget Receipts and Outlays from 1930 to the present.
- Federal Budgets of the United States Government from fiscal years 1996 to the present.
- Index to the narrative section of the United States Federal Budget for 2018 plus concordance
- Recent CBO documents:
- "Chart talk" examples: One of the best ways to understand the long-term budget risks is through helpful charts. The following sources contain charts and commentary:
- Budget games and simulations:
- United States public debt
- United States fiscal cliff
- 2011 U.S. debt ceiling crisis
- Starve the beast (policy)
- Government budget by country
- I.O.U.S.A., documentary film by Patrick Creadon
- Modern Monetary Theory
- Unemployment in the United States
- List of U.S. state budgets
- Continuing resolution
- Appropriations bill (United States)
Economic Ranking of Countries by: Gross Domestic Product (GDP) vs. by Purchasing Power Parity (PPP)
YouTube Video: Top 10 Richest Countries by GDP (PPP) per capita
Pictured: Economic Ranking of Countries (L) by GDP and (R) by PPP
Click here for a List of Countries by Gross Domestic Product (GDP):
Gross domestic product (GDP) is the market value of all final goods and services from a nation in a given year. Countries are sorted by nominal GDP estimates from financial and statistical institutions, which are calculated at market or government official exchange rates.
Nominal GDP does not take into account differences in the cost of living in different countries, and the results can vary greatly from one year to another based on fluctuations in the exchange rates of the country's currency. Such fluctuations may change a country's ranking from one year to the next, even though they often make little or no difference in the standard of living of its population.
Comparisons of national wealth are also frequently made on the basis of purchasing power parity (PPP), to adjust for differences in the cost of living in different countries. PPP largely removes the exchange rate problem, but has its own drawbacks; it does not reflect the value of economic output in international trade, and it also requires more estimation than nominal GDP. On the whole, PPP per capita figures are less spread than nominal GDP per capita figures.
The United States is the world's largest economy with a GDP of approximately $18.56 trillion, notably due to high average incomes, a large population, capital investment, moderate unemployment, high consumer spending, a relatively young population, and technological innovation.
Tuvalu is the world's smallest national economy with a GDP of about $32 million because of its very small population, a lack of natural resources, reliance on foreign aid, negligible capital investment, demographic problems, and low average incomes.
Although the rankings of national economies have changed considerably over time, the United States has maintained its top position since the Gilded Age, a time period in which its economy saw rapid expansion, surpassing the British Empire and Qing dynasty in aggregate output.
Since China's transition to a market-based economy through privatization and deregulation, the country has seen its ranking increase from ninth in 1978 to second to only the United States in 2016 as economic growth accelerated and its share of global nominal GDP surged from 2% in 1980 to 15% in 2016.
India has also experienced a similar economic boom since the implementation of neoliberal reforms in the early 1990s.
When supranational entities are included, the European Union is the second largest economy in the world. It was the largest from 2004, when ten countries joined the union, to 2014, after which it was surpassed by the United States.
The first list largely includes data compiled by the International Monetary Fund's World Economic Outlook for 2016, the second list shows the World Bank's 2016 estimates, and the third list includes data compiled by the United Nations Statistics Division for 2015.
Several economies which are not considered to be countries (the world, the European Union, and some dependent territories) are included in the lists because they appear in the sources as distinct economies. These economies are italicized and not ranked in the charts, but are listed where applicable.
___________________________________________________________________________
Click here for a List of Countries by their estimated forecast of gross domestic product based on purchasing power parity, abbreviated GDP (PPP):
Countries are sorted by GDP PPP forecast estimates from financial and statistical institutions in the limited period January-April 2017, which are calculated at market or government official exchange rates. The data given on this page are based on the international dollar, a standardized unit used by economists.
GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing a nation's domestic market because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates which may distort the real differences in per capita income.
It is however limited when measuring financial flows between countries. PPP is often used to gauge global poverty thresholds and is used by the United Nations in constructing the human development index. These surveys such as the International Comparison Program include both tradable and non-tradable goods in an attempt to estimate a representative basket of all goods.
The first table includes estimates for the year 2017 for all current 191 International Monetary Fund (IMF) members as well as Hong Kong and Taiwan (the official list says "Taiwan, Province of China").
Data are in millions of international dollars; they were calculated by the IMF. Figures were published in April 2017.
The second table includes data, mostly for the year 2015, for 180 of the 193 current United Nations member states as well as Hong Kong and Macau (the two Chinese Special Administrative Regions). Data are in billions of international dollars; they were compiled by the World Bank.
The third table is a tabulation of the CIA World Factbook Gross Domestic Product (GDP) (Purchasing Power Parity) data update of 2016. The data for GDP at purchasing power parity have also been rebased using the new International Comparison Program price surveys and extrapolated to 2007.
Click on any of the following blue hyperlinks for more about The List of Countries by GDP/PPP:
Gross domestic product (GDP) is the market value of all final goods and services from a nation in a given year. Countries are sorted by nominal GDP estimates from financial and statistical institutions, which are calculated at market or government official exchange rates.
Nominal GDP does not take into account differences in the cost of living in different countries, and the results can vary greatly from one year to another based on fluctuations in the exchange rates of the country's currency. Such fluctuations may change a country's ranking from one year to the next, even though they often make little or no difference in the standard of living of its population.
Comparisons of national wealth are also frequently made on the basis of purchasing power parity (PPP), to adjust for differences in the cost of living in different countries. PPP largely removes the exchange rate problem, but has its own drawbacks; it does not reflect the value of economic output in international trade, and it also requires more estimation than nominal GDP. On the whole, PPP per capita figures are less spread than nominal GDP per capita figures.
The United States is the world's largest economy with a GDP of approximately $18.56 trillion, notably due to high average incomes, a large population, capital investment, moderate unemployment, high consumer spending, a relatively young population, and technological innovation.
Tuvalu is the world's smallest national economy with a GDP of about $32 million because of its very small population, a lack of natural resources, reliance on foreign aid, negligible capital investment, demographic problems, and low average incomes.
Although the rankings of national economies have changed considerably over time, the United States has maintained its top position since the Gilded Age, a time period in which its economy saw rapid expansion, surpassing the British Empire and Qing dynasty in aggregate output.
Since China's transition to a market-based economy through privatization and deregulation, the country has seen its ranking increase from ninth in 1978 to second to only the United States in 2016 as economic growth accelerated and its share of global nominal GDP surged from 2% in 1980 to 15% in 2016.
India has also experienced a similar economic boom since the implementation of neoliberal reforms in the early 1990s.
When supranational entities are included, the European Union is the second largest economy in the world. It was the largest from 2004, when ten countries joined the union, to 2014, after which it was surpassed by the United States.
The first list largely includes data compiled by the International Monetary Fund's World Economic Outlook for 2016, the second list shows the World Bank's 2016 estimates, and the third list includes data compiled by the United Nations Statistics Division for 2015.
Several economies which are not considered to be countries (the world, the European Union, and some dependent territories) are included in the lists because they appear in the sources as distinct economies. These economies are italicized and not ranked in the charts, but are listed where applicable.
___________________________________________________________________________
Click here for a List of Countries by their estimated forecast of gross domestic product based on purchasing power parity, abbreviated GDP (PPP):
Countries are sorted by GDP PPP forecast estimates from financial and statistical institutions in the limited period January-April 2017, which are calculated at market or government official exchange rates. The data given on this page are based on the international dollar, a standardized unit used by economists.
GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing a nation's domestic market because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates which may distort the real differences in per capita income.
It is however limited when measuring financial flows between countries. PPP is often used to gauge global poverty thresholds and is used by the United Nations in constructing the human development index. These surveys such as the International Comparison Program include both tradable and non-tradable goods in an attempt to estimate a representative basket of all goods.
The first table includes estimates for the year 2017 for all current 191 International Monetary Fund (IMF) members as well as Hong Kong and Taiwan (the official list says "Taiwan, Province of China").
Data are in millions of international dollars; they were calculated by the IMF. Figures were published in April 2017.
The second table includes data, mostly for the year 2015, for 180 of the 193 current United Nations member states as well as Hong Kong and Macau (the two Chinese Special Administrative Regions). Data are in billions of international dollars; they were compiled by the World Bank.
The third table is a tabulation of the CIA World Factbook Gross Domestic Product (GDP) (Purchasing Power Parity) data update of 2016. The data for GDP at purchasing power parity have also been rebased using the new International Comparison Program price surveys and extrapolated to 2007.
Click on any of the following blue hyperlinks for more about The List of Countries by GDP/PPP:
- List of countries by GDP (nominal) per capita
- List of countries by GDP (PPP) per capita
- List of IMF ranked countries by GDP, IMF ranked GDP (nominal), GDP (nominal) per capita, GDP (PPP), GDP (PPP) per capita, Population, and PPP
- List of IMF ranked countries by past and projected GDP (PPP)
- List of countries by real GDP growth rate
- List of countries by Human Development Index
- List of countries by income equality
- List of countries by distribution of wealth
- Lists of countries by GDP
- National wealth
Supply and Demand, including the Impact of Covid-19 on Supply and Demand
TOP: COVID-19 is hurting many industries and workers, but could it help trade and logistics? (Brookings)
BOTTOM: The shelves may be empty at some grocery stores nationwide right now, but the shortage won’t last forever as toilet paper and other household goods make their way through the supply chain. (Forbes)
- YouTube Video: Understanding the Economic Shock of the Covid-19 Crisis (Harvard Review)
- YouTube Video: Here's how coronavirus can affect global supply and demand (MIT)
- YouTube Video: What coronavirus means for the global economy | Ray Dalio (Ted)
TOP: COVID-19 is hurting many industries and workers, but could it help trade and logistics? (Brookings)
BOTTOM: The shelves may be empty at some grocery stores nationwide right now, but the shortage won’t last forever as toilet paper and other household goods make their way through the supply chain. (Forbes)
[Your Webhost: while typically including the economic impact of Covid-19 (bottom topic) might not apply to this opening topic ("Supply and Demand"), in fact, Covid-19 has weighed heavily against all countries in terms of both economic consequences and loss of life!]
Supply and Demand:
In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.
Click on any of the following blue hyperlinks for more about Supply and Demand:
Shortages related to the COVID-19 pandemic
Medical materials and other goods shortages caused by the COVID-19 pandemic quickly became a major issue of the pandemic. The matter of pandemic-related shortage has been studied in the past and has been documented in recent events.
On the medical side, shortages of personal protective equipment such as medical masks, gloves, face shields, sanitizing products, are also joined by potential shortage of more advanced devices such as hospital beds, Intensive care unit (ICU) beds, oxygen therapy, ventilators and ECMO (Extracorporeal membrane oxygenation) devices.
Human resources, especially in terms of medical staff, may be drained by the overwhelming extent of the epidemic and associated workload, together with losses by contamination, isolation, sickness or mortality among health care workers. Territories are differently equipped to face the pandemic.
Various emergency measures have been taken to ramp up equipment levels such as purchases, while calls for donations, local 3D makers, volunteer staffing, mandatory draft, or seizure of stocks and factory lines have also occurred.
Bidding wars between different countries and states over these items are reported to be a major issue, with price increases, orders seized by local government, or cancelled by selling company to be redirected to higher bidder. In some cases, medical workers have been ordered to not speak about these shortages of resources.
While public health advocates and officials have encouraged to flatten the curve by social distancing, the unmitigated ICU needs would be about 50 times the available ICU beds and ventilators capacity of most developed countries. There have also been calls to increase healthcare capacity despite shortages.
Background:
Long term and structural:
See also: Pandemic predictions and preparations prior to COVID-19
Following warnings and increased preparedness in the 2000s, the 2009 swine flu pandemic led to rapid anti-pandemic reactions among Western countries.
The H1N1/09 virus strain, with mild symptoms and low lethality, eventually led to a backlash over public sector over-reactiveness, spending, and the high cost/benefit of the 2009 flu vaccine.
In the following years, national strategic stockpiles of medical equipment were not systematically renewed. In France, a €382 million spending for H1N1 vaccines and masks was widely criticized. French health authorities decided in 2011 to not replace their stocks, to reduce acquisitions and storage costs, to rely more on supplies from China and just-in-time logistics, and to distribute the responsibility to private companies on an optional basis.
In 2013, in order to save cost, a law moved responsibility for personal protective equipment (PPE) stockpiles from the French government to public and private enterprises, which had to plan the security of their workers, without any verification mechanisms in place.
National manufacturers could not compete with Chinese manufacturers' prices on this new open market. The former strategic masks producer closed in 2018 while the French strategic stockpile dropped in this period from one billion surgical masks and 600 million FFP2 masks in 2010 to 150 million and zero, respectively, in early 2020.
France has been called a case study of Juan Branco, author of a critical book on French President Emmanuel Macron's rise to power, argued that selfish quest of power and loyalty in leadership led young and unexperienced people to be in charge of nation-wide health care reforms via blind accounting analysis and management.
France has been cited as a case study for countries now considering a U-turn over the past two decades of globalization of health supplies to gain lower immediate costs. The same approach was taken in the United States. The U.S. Strategic National Stockpile's stock of masks used against the 2009 flu pandemic was not replenished, neither by the Obama administration nor by the Trump administration.
American masks manufacturer Mike Bowen of Prestige Ameritech had been warning for years that the USA mask supply chain was too dependent on China. As Juan Branco for France, Former US President Obama denounced short-term individualistic mindset as negatively affecting public decision making and preparedness.
According to a report in the New York Times, Russian agents spent decades promoting debunked public health scares to increase mistrust toward the Federal government of the United States and its officials at home and abroad, but also to damage American science, a foundation of US national prosperity. These efforts have been linked to lower support for public health programs, anti-vaccines scares and illnesses spread, and weaker global pandemic preparedness prior to the 2020 pandemic.
Several public (World Health Organization (WHO), World Bank, Global Preparedness Monitoring Board) and private initiatives raised awareness about pandemic threats and needs for better preparedness.
Since 2015, Bill Gates has been warning about needing to prepare for a global pandemic. International divisions and lack of suitable collaboration limited preparedness. WHO's pandemic influenza preparedness project had a US$39 million two-year budget, out of WHO's 2020–2021 budget of US$4.8 billion. While WHO gives recommendations, there is no sustained mechanism to review countries' preparedness for epidemics and their rapid response abilities.
According to international economist Roland Rajah, while there are guidelines, local action depends on local governance. Andy Xie, writing in the South China Morning Post, argued that ruling elites, obsessed with economic metrics, failed to prepare their communities against well-known pandemic risks.
Tax systems in the early twenty-first century, by favoring the largest corporations with anti-competitive practices and lower investment rates into innovation and productions, favored corporate actors and corporate profits, increasing the risk of shortages and weakening the society ability to respond to a pandemic.
Early outbreaks in Hubei, Italy, and Spain showed that several wealthy countries' health care systems were overwhelmed. In developing countries with weaker medical infrastructure, oxygen therapy, equipment for intensive care bed and other medical needs, shortages were expected to occur earlier.
Tests:
See also: COVID-19 testing
Testing shortage is a key element preventing authorities from measuring the true extent of current epidemic spread. Germany and Korea's anticipative and aggressive testing strategies has helped to reduce the measured fatality rate. Germany started producing and stockpiling COVID-19 tests as soon as January 2020.
Diagnostic tests:
Reagents:
In Ireland and the UK, in late March and early April, reagent shortages limited the number of tests. By March, insufficient amounts of reagent became a bottleneck for mass testing in the European Union (EU), United Kingdom (UK) and the United States (US).
This has led some authors to explore sample preparation protocols that involve heating samples at 98 °C (208 °F) for 5 minutes to release RNA genomes for further testing.
In UK, on 1 April, the UK government confirmed that a total of 2,000 NHS staff had been tested for coronavirus since the outbreak began, but Cabinet Office Minister Michael Gove said a shortage of chemicals needed for the test meant it was not possible to screen the NHS's 1.2 million workforce.
Gove's statement was contradicted by the Chemical Industries Association, which said there was not a shortage of the relevant chemicals and that at a meeting with a business minister the week before the government had not tried to find out about potential supply problems.
There were also reagent shortages in the United States. Some hospitals manufactured their own reagents from publicly-available recipes.
Swabs:
A feared shortage of swabs in Iceland was averted when stocks were found to bridge the gap until more arrived from China. There were no swabs in the US Strategic National Stockpile, and the US had shortages, despite the one pre-pandemic domestic manufacturer increasing production to 1 million swabs per day in March, and government funding for it to build a new factory in May. Shortages also arose in the UK, but were resolved by 2 April.
In-house manufacturing:
The US FDA licensed a swab-free saliva test and more new swab designs, including 3-D printed versions which are now being manufactured in the labs, hospitals, and other medical facilities using the swabs.
In the US, general-use nasal swabs are Class I medical devices, and are not approved by the FDA. The NIH said that they should follow FDA labelling requirements, be made in a facility registered and listed with the FDA, and pass a publicly-available safety testing protocol.
The material must also be safe; an already-approved autoclavable surgical-grade plastic can be used. The full development process can take as little as two weeks. 3-D-printed swabs increased the demand for suitable 3-D printers.
Some 3-D-printed swab designs are publicly-licensed under Creative Commons licenses, and others are patented, but with the 3-D printing files freely available on request to permitted facilities during the epidemic.
Personal protective equipment:
Generalities:
Although the vast majority of PPE is produced in China, domestic supplies were insufficient. The Chinese government took control of stocks from foreign enterprises whose factories produced these goods. Medicon, whose three factories produced such supplies in China, saw their stocks seized by the Communist Party-led government.
Figures from China Customs show that some 2.46 billion pieces of epidemic prevention and control materials had been imported between 24 January and 29 February, including 2.02 billion masks and 25.38 million items of protective clothing valued at 8.2 billion yuan ($1 billion).
The Press reported that the China Poly Group, together with other Chinese companies and state-owned enterprises, had an important role in scouring markets abroad to procure essential medical supplies and equipment for China. Risland (formerly Country Garden) sourced 82 tons of supplies, which were subsequently airlifted to Wuhan.
Greenland Holdings also sourced bulk supplies of medical consumables such as surgical masks, thermometers, antibacterial wipes, hand sanitisers, gloves and paracetamol for shipping to China. The mass procurement of supplies at wholesale and retail levels by Chinese companies to help their compatriots back home have contributed to shortages of products in western countries where these Chinese companies operate. On 24 March the Australian Prime Minister Scott Morrison announced restrictions on such activities.
Given that the global supply of PPE is insufficient, and following these Chinese measures, the World Health Organization (WHO) recommended in February 2020 minimizing the need for PPE through telemedicine; physical barriers, such as:
Quality issues exacerbating shortages:
In late-March/early-April 2020, as Western countries were in turn dependent on China for supplies of masks and other equipment, European politicians e.g. the EU chief diplomat Josep Borrell accused China of a soft-power play to influence world opinion.
Also, some of the supplies sent to Spain, Turkey, and the Netherlands were rejected as being faulty. Dutch health ministry issued a recall of 600,000 face masks from a Chinese supplier on 21 March that did not fit properly and whose filters did not work as intended despite them having a quality certificate.
The Spanish government discovered that 60,000 out of 340,000 test kits from a Chinese manufacturer did not accurately test for COVID-19. The Chinese Ministry of Foreign Affairs responded that the customer should "double-check the instructions to make sure that you ordered, paid for and distributed the right ones. Do not use non-surgical masks for surgical purposes".
In mid-May, the European Commission suspended an order of 10 million Chinese masks destined for member states and the UK after two countries reported having received sub-standard products. The masks had been ordered by the EU's executive arm and was set to be distributed in six weekly instalments.
After a first batch of 1.5 million masks was distributed to 17 of the 27 member states and Britain, Poland said the 600,000 items they received did not have European certificates nor did they comply with the necessary standard. Commission health spokesman Stefan De Keersmaecker vowed to investigate and take the necessary action.
By April 2020, studies revealed that a significant percentage of those with coronavirus were asymptomatic, allowing the virus to spread undetected. Therefore, the CDC recommended "wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain".
Sanitizing products:
Hand sanitizer went out of stock in many areas, causing price gouging. In response, brewers and distillers began to produce hand sanitizer.
Protective gear:
In the United States, shortages were such that some nurses at one New York City hospital resorted to wearing garbage bags as an alternative to unavailable protective clothing.
In light of the shortages of traditional protective gear, small businesses throughout the United States have been retooling to produce makeshift protective devices, often created through open source design initiatives in which manufacturers donate the gear to hospitals.
An example is the COVID-19 Intubation Safety Box, first used by hospitals in Taiwan, which is an acrylic cube placed over an infected patient's torso, with openings that allow ventilator intubation and extubation while minimizing contaminated droplet risk to healthcare workers.
CNBC reported that E-commerce platform Amazon banned sales of N95 face masks in the name of price gouging; the shortages of N95 protective gear became even more serious. Amazon Third party Golden Tree Supply turn to Canadian E-commerce platform Shopify to keep on supplying N95 face masks to the people of United States.
In March, The Doctors' Association UK alleged that shortages were covered-up through intimidating emails, threats of disciplinary action and in two cases being sent home from work.
Some doctors were disciplined after managers were annoyed by material they had posted online regarding shortages of surgical masks, goggles, visors and especially gowns in many British National Health Service hospitals.
On 18 April, the communities secretary, Robert Jenrick, reported that 400,000 protective gowns and other PPE were on their way to the U.K. from Turkey. One day later, these were delayed; this led hospital leaders to directly criticise the government for the first time during the pandemic.
The shipment arrived at Istanbul airport en route to the U.K. two days after ministers said that the PPE would appear in the country. Only 32,000 of the order arrived (less than one-tenth), despite the NHS making a down payment to secure its arrival on 22 April. Eventually, these all had to be returned to Turkey as they did not meet NHS standards.
In July, U.S. Customs and Border Protection (CBP) banned products by the Malaysia-based Top Glove and its subsidiary TG Medical due to alleged violations of workers' rights including "debt bondage, excessive overtime, retention of identification documents, and abusive working and living conditions." Most of the world's glove supply comes from Malaysia.
Facial masks:
See also:
Early epidemic in China:
As the epidemic accelerated, the mainland market saw a shortage of face masks due to increased public demand. In Shanghai, customers had to queue for nearly an hour to buy a pack of face masks; stocks were sold out in another half an hour.
Hoarding and price gouging drove up prices, so the market regulator said it would crack down on such acts. In January 2020, price controls were imposed on all face masks on Taobao and Tmall.
Other Chinese e-commerce platform – JD.com, Suning.com, Pinduoduo – did likewise; third-party vendors would be subject to price caps, with violators subject to sanctions.
National stocks and shortages:
In 2006, 156 million masks were added to the U.S. Strategic National Stockpile in anticipation of a flu pandemic. After they were used against the 2009 flu pandemic, neither the Obama administration nor the Trump administration renewed the stocks. By 1 April, U.S.'s Strategic National Stockpile was nearly emptied.
In France, 2009 H1N1-related spending rose to €382 million, mainly on supplies and vaccines, which was later criticized. It was decided in 2011 to not replete its stocks and rely more on supply from China and just-in-time logistics. In 2010, its stock included 1 billion surgical masks and 600 million FFP2 masks; in early 2020 it was 150 million and zero, respectively.
While stocks were progressively reduced, a 2013 rational stated the aim to reduce costs of acquisition and storage, now distributing this effort to all private enterprises as an optional best practice to ensure their workers' protection. This was especially relevant to FFP2 masks, more costly to acquire and store.
As the COVID-19 pandemic in France took an increasing toll on medical supplies, masks and PPE supplies ran low and caused national outrage. France needs 40 million masks per week, according to French president Emmanuel Macron. France instructed its few remaining mask-producing factories to work 24/7 shifts, and to ramp up national production to 40 million masks per month. French lawmakers have opened an inquiry on the past management of these strategic stocks.
In the wake of the 2020 COVID-19 pandemic and widespread complaints by nurses and other health care workers about lack of N95 masks and proper protocols, National Nurses United, the largest organization of registered nurses in the United States, filed over 125 complaints with Occupational Safety and Health Administration (OSHA) offices in 16 states charging hospitals with failing to comply with laws mandating safe workplaces in which COVID-19 nurses should be provided N-95 masks.
The World Health Organization (WHO) called for industry and governments to increase manufacturing by 40% to meet global demands on 3 March 2020 and they also released a document on 6 April 2020 with recommendations for the rational use of PPE. This document was intended for those in the health care and community settings, including the handling of cargo.
This global PPE shortage issue soon became a subject of interest for the concerned public. Academics from the likes of Science Foundation Ireland researched how we can find a solution and avoid this shortage in the future. Simultaneously, independent initiatives and online platforms like [https://PPE Needed.com PPE Needed] were started to provide an immediate solution. UNICEF has also taken steppes to mitigate this current risk and anticipate near-term effects of COVID-19 as well as the access to PPE suppliers.
Competition for supplies:
Countries such as Britain, France, Germany, South Korea, Taiwan, China, India, and others initially responded to the outbreak by limiting or banning exports of medical supplies to protect their citizens, including rescinding orders that other nations already secured.
Germany blocked exports of 240,000 masks bound for Switzerland and also stopped similar shipments to the Central Bohemian Region as well. One French company, Valmy SAS, was forced to block an order for PPE to be sent to the UK, after the company's UK representative told CNN that the order had been blocked by customs officials at the French coast.
Turkey blocked a shipment of ventilators bought by two regional Spanish governments from a Turkish company, citing the risk of a shortage at home in holding onto the ventilators; 116 of the ventilators were later released.
As the pandemic began to worsen, governments began employing strong-arm tactics including even surreptitious means to obtain medical supplies necessary to fight the coronavirus, either through paying more cash to reroute or seizing such equipment.
Slovakian prime minister Peter Pellegrini said the government was preparing cash worth 1.2 million euros ($1.3 million) to purchase masks from a contracted Chinese supplier. He then said "However, a dealer from Germany came there first, paid more for the shipment, and bought it."
Ukraine lawmaker Andriy Motovylovets also stated that "Our consuls who go to factories find their colleagues from other countries (Russia, USA, France, Germany, Italy, etc) who are trying to obtain our orders. We have paid upfront by wire transfer and have signed contracts.
But they have more money, in cash. We have to fight for each shipment." San Marino authorities said they arranged a bank transfer to a supplier in Lugano, Switzerland, to pay for a half-million masks to be shared with Italian neighbous. However, the truck came in empty, because one or several unidentified foreign buyers offered more instead.
Germany snatched 830,000 surgical masks that were arriving from China and destined for Italy. Although Italian authorities managed to persuade Germany to release them, no one in Germany, however, found the masks they seized at all. 1.5 million face masks that were supposed to be delivered from Spain to Slovenia were seized by German agents.
French guards confiscated lorries filled with 130,000 face masks and boxes of sanitisers bound for the UK in what was described as a "despicable act" by the British government.
Italian customs police hijacked some 800,000 imported masks and disposable gloves that were about to be sent to Switzerland.
On 22 March, an Italian newspaper said that the 680,000 face masks and ventilators it ordered from China were confiscated by the Czech Republic's police. They carried out an anti-trafficking operation in which they seized equipment from a warehouse of a private company in northern town of Lovosice.
According to Czech authorities, the donation from China represented only just over 100,000 masks. Czech government sent 110,000 items to Italy as compensation. It's unclear how the masks ended up in Lovosice. Czech Foreign Minister Tomáš Petříček told AFP: "Lovosice is not quite en route from China to Italy."
Valérie Pécresse, regional counselor of Île-de-France, alleged that some Americans, in their aggressive search for stocks, had made tarmac bids for stocks of masks – sight unseen – awaiting loading onto transporters, paying 3 times the price in cash.
However, Politico Europe reported the French claim as "unsubstantiated" and the U.S. Embassy in Paris stated that "The United States government has not purchased any masks intended for delivery from China to France. Reports to the contrary are completely false."
On 3 April, Berlin politician Andreas Geisel accused U.S. agents of appropriating a shipment of 200,000 3M-made face masks meant for Berlin police from the airport in Bangkok. However, these claims were proven false, as 3M revealed it "has no records of an order for respiratory masks from China for the Berlin police" and Berlin police later confirmed that the shipment was not seized by U.S. authorities, but was said to have simply been bought at a better price, widely believed to be from a German dealer or China.
This revelation outraged the Berlin opposition, whose CDU parliamentary group leader Burkard Dregger accused Geisel of "deliberately misleading Berliners" in order "to cover up its own inability to obtain protective equipment". FDP interior expert Marcel Luthe said "Big names in international politics like Berlin's senator Geisel are blaming others and telling US piracy to serve anti-American clichés."
Politico Europe reported that "the Berliners are taking a page straight out of the Trump playbook and not letting facts get in the way of a good story." The Guardian also reported that "There is no solid proof Trump [nor any other American official] approved the [German] heist".
On 3 April, Jared Moskowitz, head of Florida Division of Emergency Management, accused the American company 3M of selling N95 masks directly to foreign countries for cash instead of the United States.
Moskowitz stated that 3M agreed to authorise distributors and brokers to represent they were selling the masks to Florida, but instead his team for the last several weeks "get to warehouses that are completely empty." He then said the 3M authorized U.S. distributors later told him the masks Florida contracted for never showed up because the company instead prioritized orders that come in later, for higher prices, from foreign countries (including Germany, Russia, and France).
As a result, Moskowitz highlighted the issue on Twitter, saying he decided to "troll" 3M. Forbes reported that "roughly 280 million masks from warehouses around the U.S. had been purchased by foreign buyers [on 30 March 2020] and were earmarked to leave the country, according to the broker – and that was in one day", causing massive critical shortages of masks in the U.S.
Using the Defense Production Act, the Trump administration ordered 3M to stop selling US-produced masks to Canada and Latin America, a move the company said would cause "significant humanitarian implications" and could cause those countries to retaliate, resulting in a net decrease of supplies in the US.
On 3 April, the Swedish health care company Mölnlycke announced that France had seized millions of face masks and gloves that the company imported from China to Spain and Italy. The company's general manager, Richard Twomey, denounced France for "confiscat[ing] masks and gloves even though it was not [its] own. This is an extremely disturbing, unbecoming act." Mölnlycke estimated a total of "six million masks was seized by the French.
All had been contracted for, including a million masks each for France, Italy and Spain. The rest were destined for Belgium, the Netherlands, Portugal and Switzerland, which has special trading status with the EU." Sweden's foreign ministry stated to Agence France-Presse that "We expect France to promptly cease the requisition of medical equipment and do what it can to ensure that supply chains and the transportation of goods are secured. The common market has to function, particularly in times of crisis."
On 24 April, San Francisco Mayor London Breed complained that her city's orders for PPE were diverted to other cities and countries. She said "We’ve had issues of our orders being relocated by our suppliers in China. For example, we had isolation gowns on their way to San Francisco and they were diverted to France. We’ve had situations when things we’ve ordered that have gone through Customs were confiscated by FEMA to be diverted to other locations."
Trade in medical supplies between the United States and China has also become politically complicated. Exports of face masks and other medical equipment to China from the United States (and many other countries) spiked in February, according to statistics from Trade Data Monitor, prompting criticism from the Washington Post that the United States government failed to anticipate the domestic needs for that equipment.
Similarly, The Wall Street Journal, citing Trade Data Monitor to show that China is the leading source of many key medical supplies, raised concerns that US tariffs on imports from China threaten imports of medical supplies into the United States.
Reuse of Masks:
Shortage in single-use medical mask and field reports of reuse lead to the question of which process could properly sanitize these PPE without altering their filtering capacity.
FFP2 masks can be sanitized by 70 °C vapor allowing reuses. Use of alcohol is discouraged since it alters N95 mask microfibers' static charge which helps filtration. Chlorine is also discouraged since its fumes may be harmful. Authors are warning against reuses by non-professionals, pointing out that even the best scored methods can degrade the mask if not performed properly.
A Singaporean study found no contamination on mask after brief care to COVID-19 patients, suggesting masks could be reused for multiple patients cares. A portion of SARS-CoV-2 virus can survive long exposure to 60 °C.
Makers have designed Arduino-controlled disinfection boxes, with temperature controls, to safely reuse surgical and N95 masks.
Gas disinfection allows 10 reuse.
DIY masks:
Following N95 masks shortages, volunteers created 3D printed "NanoHack" alternative. This printed mask allows to use hand-cut surgical mask as fine-particle filters.
Given the scarcity of masks and ambiguity on their efficiency, individuals and volunteers have started to produce cloth masks for themselves or for others. Various designs are shared online to ease creation.
Medical face shield:
Reacting to shortage of face shield, volunteers from the maker community with 3D printing abilities initiated an effort to produce face-shields for hospital staff.
3D printer manufacturers:
At the early stage, a few 3D printer manufacturers published their designs.
On 14 March, Budmen Industries, a custom 3D printer maker in New York, created a face shield design and produced their first 50 shields with a plan to donate to the Onondaga County to use in a COVID-19 testing site.
The company published their design and it had more than 3,000 downloads within a week. By the end of the month, the company and its partner made 5,000 face shields with global requests for 260,000 units.
On 16 March, Prusa Research, a Czech 3D printer manufacturer, started working on a face shield design for medical use . The design was approved by the Czech Ministry of Health and went to a field test and a large scale production within 3 days.
The company published the design for people to make face shields to support local efforts. The design was downloaded in a large number by makers around the world. By the end of March, the company employed 500 employees to work on the 10,000 shields order. Their design was downloaded 40,000 times.
Local volunteers:
As the shortage of personal protective equipment in New York City hospitals got into a critical stage, volunteers started making face shields using the Budmen design on 20 March.
More efforts were started by various groups from hobbyists, academics, to experts. Many designs had been created and groups were formed to supply face shields to local hospitals.
On 24 March, while the epidemic was expanding, popular French 3D maker and YouTuber Heliox announced on 24 March that she would produce face shields for free, building upon another maker's design. She was quickly contacted by local hospitals, health centers and other medical professionals asking for rapid delivery of face shields. The visible popularity of her initiative caused other 3D makers to join the effort and offer their help in other regions to connect health facilities with nearby makers.
On 30 March, The New York Times published a video on COVID-19-related shortages and healthcare workers' DIY solutions.
Government agencies:
On 23 March 2020, United States Food and Drug Administration (FDA), United States Department of Veterans Affairs (VA), and National Institutes of Health (NIH) entered into a memorandum of understanding to form a public-private partnership with America Makes, a non-profit organization, to test designs of 3D printed personal protective equipment including face shields.
The agreement was to have NIH to provide the 3D Print Exchange system to solicit open designs, VA to perform testing in clinical settings, FDA to participate in the review process and America Makes to coordinate with makers to produce the approved designs for healthcare facilities. As of 18 June 13 face shields have been reviewed as appropriate for clinical use.
On 9 April 2020, FDA issued an emergency use authorization that included an authorization for the use of face shields by health care personnel. FDA laid out the details of the conditions, and waiver of requirements for face shield makers in a letter on 13 April 2020.
Companies:
Apple Inc. announced on 5 April they would produce 1 million face shields per week to be sent to U.S. hospitals.
By mid April, many large companies such as Hewlett-Packard, Ford Motor Company, and Blue Origin had joined the efforts to make face shields. Even sports equipment manufacturers such as Bauer Hockey joined in and started making face shields for medical workers.
Medical care devices:
The availability of critical care beds or ICU beds, mechanical ventilation and ECMO devices generally closely associated with hospital beds has been described as a critical bottleneck in responding to the ongoing COVID-19 pandemic. The lack of such devices dramatically raises the mortality rate of COVID-19.
Oxygenation mask:
Popular snorkelling masks have been adapted into oxygen dispensing emergency respiratory masks via the usage of 3D printed adapters and minimal modifications to the original mask.
According to Italian laws relative to medical cares where the project has occurs, usage by the patient requires a signed declaration of acceptance of use of an uncertified biomedical device. The project provides the 3D files for free, as well as 2 forms to register hospitals in need and 3D makers willing to produces adapters.
In France, the main sportswear and snorkeling masks producer Decathlon has locked down its mask sales to redirect them toward medical staff, patients and 3D makers. An international collaboration including Decathlon, BIC, Stanford, and other actors is on track to scale up production for international needs.
Intensive care beds:
See also: List of countries by hospital beds
Both rich countries and developing countries have or will face intensive care beds shortages, but the situation is expected to be more intense in developing countries due to lower equipment levels.
In early March, the UK government supported a strategy to develop natural herd immunity, drawing sharp criticism from medical personnel and researchers. Various forecasts by Imperial College COVID-19 Response Team, made public on 16 March, suggested that the peak number of cases in the UK would require between 100 and 225 CCBs / 100,000 inhabitants, if proper mitigation or no mitigation strategies are put into force, respectively.
These requirements would both exceed the UK's current capacities of 6.6–14 CCB / 100,000 inhabitants. In the best case scenario, the peak caseload would require 7.5 times the current number of available ICU beds. Around 16 March, the UK government changed trajectory toward a more standard mitigation/suppression strategy.
In France, around 15 March, the Grand Est region was the first to express the scarcity of CCB limiting its handling of the crisis. Assistance-publique Hôpitaux de Paris (AP-HP), which manages most hospitals in the French capital area (~10 million inhabitants), reported the need for 3,000–4,000 ICUs. Current capacity is reported to be between 1500[ and 350, depending on the source.
In France, given shortages of ICU hospital beds in Grand Est and Ile-de-France regions, severe but stable patients with ARS and breathing assistance have been moved toward other regional medical centers within France, Germany, Austria, Luxembourg or Switzerland.
Mechanical ventilation:
Mechanical ventilation has been called "the device that becomes the decider between life and death" for COVID-19 patients because 3.2% of detected cases need ventilation during treatment. Ventilators shortage is endemic in the developing world.
In case of shortage, some triage strategies have been previously discussed. One strategy is to grade the patient on dimensions such as: prospects for short-term survival; prospects for long-term survival; stage of life-related considerations; pregnancy and fair chance. The frequent 15 to 20 day duration of the intubation to recover is an important factor in the ventilator's shortage.
An important way of reducing demand for ventilators is the use of CPAP devices as a first resort. For this reason CPAP devices themselves have become a scarce item.
Official assessments:
In the 2000s, the U.S. CDC estimated a national shortage of 40–70,000 ventilators in case of pandemic influenza. From this assessment resulted Project Aura, a public-private initiative to design a frugal, $3,000 mechanical ventilator, simple to mass-produce, and able to supply the Strategic National Stockpile.
Newport Medical Instruments was granted the contract, designing and prototyping (2011) the frugal ventilators to CDC officials, and expecting to later profit from the product by moving into the private market where competing devices were sold for $10,000.
In April 2012, US Health and Human Services officials confirmed to the US Congress that the project was on schedule to file for market approval in late 2013, after which the device would go into mass-production. In May 2012, US$12 billion medical conglomerate Covidien, a top actor of the mechanical ventilation market, acquired Newport for $100 million.
Covidien soon asked to cancel the Project Aura contract since it wasn't profitable enough. Former Newport executives, government officials and executives at rival ventilator companies suspect Covidien acquired Newport to prevent the frugal $3,000 ventilator design from disturbing its profitable ventilation operation.
Covidien merged in 2015 into Medtronic. Project Aura looked for and then signed a new contract with Philips healthcare. In July 2019, the FDA signed for 10,000 units of their Trilogy Evo portable ventilator, to be delivered to the SNS by mid-2020.
On 25 March 2020, Andrew Cuomo made a detailed 1-hour COVID-19 press conference, emphasizing an expectation of a severe shortage of ventilators, and their importance in sustaining life in severe COVID-19 cases.
Cuomo said New York state would ultimately need about 30,000 ventilators to handle the influx, while having only 4,000 as of 25 March; on the 27th, President Trump expressed doubt about the need, saying "I don't believe you need 40,000 or 30,000 ventilators," and resisted calls to force businesses to produce them.
Later on the 27th, the President acceded to calls to assist states in ventilator procurement, using the Defense Production Act, although fears remain that procurement will not happen in time to prevent severe shortages.
Industrial suppliers:
In Europe, the company Löwenstein Medical producing 1500 ICU-level ventilators and 20,000 home-level ventilator per year for France alone, pointed out of the current high demand and production shortage.
Based in Europe, all their components are European and not relying on the Chinese supply chain. As for production ramp-up, it was suggested to increase the production of home-level ventilators, more basic and which can be assembled in half an hour, yet able to support patients through acute respiratory distress syndrome.
The current bottleneck is mainly a question of qualified human resources. In business as usual, ICU-level ventilators are to be renewed every 10 to 15 years. Due to the coronavirus pandemic, Germany and other European countries have started to take control over the company's supply.
In China, local manufacturers are racing to answer the demand. Medtronic made ventilator design specifications publicly available but licensing questions remain unclarified.
Improvised ventilators:
See also: Open-source ventilator
In the United Kingdom, despite a lack of ventilators being previously identified in Exercise Cygnus, there was a shortage of them during COVID-19 with the government stockpiles proving to be insufficient.
In March, the British government called for industry to get involved with making ventilators for the NHS, with Dyson and Babcock revealing plans on creating 30,000 medical ventilators (this amount was seen as necessary based on modelling from the time from China).
The Ventilator Challenge involved companies such as Airbus, Rolls-Royce and Ford. This was seen as impractical at the time; the type of ventilators suggested by the government to these companies were crude and would not have been able to be used in hospitals, and none of the companies involved reached the final stages of testing and the majority have proved surplus to requirements in hindsight.
3D makers have been working on various low-cost alternative ventilation devices or adaptations.
Anesthetist Dr. Alan Gauthier from Ontario, Canada, turned one single-patient ventilator into a nine-patient device thanks to a 2006 YouTube video by 2 doctors from Detroit. The method uses T-shaped tubes to split airflow and multiply the number of patients provided with respiratory support.
In Ireland, volunteers started the Open Source Ventilator Project in collaboration with medical staff.
In Italy, a local journalist and journal director Nunzia Vallini of the Giornale di Brescia (Brescia Daily) was informed that nearby Chiani hospital was running out of valves which mix oxygen with air and are therefore a critical part of reanimation devices. The valves supplier was itself out of stock leading to patient deaths.
Vallini contacted FabLab founder Massimo Temporelli, which invited Michele Faini, an expert in 3D print manufacturing and a research and development designer at Lonati SpA to join a 3D printing effort.
When the supplier didn't wish to share the design's specifics, they reverse-engineered the valves and produced a limited not-for-profit series for local hospitals. To satisfy biomedical requirements that can withstand periodic sanitation, Lonati SpA used their SLS 3D printers to print about 100 valves in Nylon PA12.
Faini and Temporelli still acknowledge the limitations of their production: 3D printing not being able to reach the quality and sterilized context of the original valves and manufacturing process. Contrary to rumous online, the valves don't cost US$10,000 each and the original manufacturer did not threaten to sue the 3D printers team.
Hackers of the Ventilator Project have brainstormed to propose to re-purposing CPAP machines (sleep-apnea masks) as ventilators, hacking single ventilators to split air-flow and treat multiple patients, and using grounded aircraft as treatment facilities to leverage their one-oxygen-mask-per-seat infrastructure.
Engineers familiar with devices design and production, medical professionals familiar existing respiratory devices and lawyers able to navigate FDA regulations if the needs arise are key participants among the 350 volunteers involved. The central avenue of exploration is to ditch away from the most advanced features of modern mechanical ventilation, which includes layers of electronics and patients monitoring systems, to focus solely on assisted respiration by pressured airflow.
The group is, by example, looking for an old Harry Diamond Laboratories "emergency army respirator" model to study. While hopeful they will be able to submit the viable and mass-producible design, several questions linger at this later levels: mass production line, FDA approval, personnel training, personnel availability, and eventually actual needs on the battlegrounds to come.
An MIT team has also designed an emergency ventilator.
ECMOs:
Extracorporeal membrane oxygenation are devices able to replace both the lungs and the patient's heart. As of 6 February 2020, the medical community was encouraged to set up criteria for ECMO patients triage.
Facilities:
Hospitals:
As Wuhan's situation worsened and to assist the overwhelmed Central Hospital of Wuhan and Dabie Mountain Regional Medical Centre, China built two emergency field hospitals within a few days: the Huoshenshan Hospital and Leishenshan Hospital. The hospitals were progressively phased out in March 2020.
On 23 March, Lieutenant General Todd T. Semonite, Chief of the U.S. Army Corps of Engineers, signaled an ongoing effort to lease existing facilities such as hotels, college dormitories, and a larger hall to temporarily convert them into medical facilities.
On 16 March, French President Emmanuel Macron announced a military hospital would be set up in the Grand-Est region, to provide up to 30 ICU beds. The hospital was being tested 7 days later.
By 8 March, Lombardy had created 482 new ICU beds. Lodi's ICU director reported that every single square metre, every single aisle of the hospital had been re-purposed for severe COVID-19 patients, increasing ICU beds from 7 to 24. In Monza, 3 new wards of 50 beds each were opened on 17 March. In Bergamo, gastrology, internal medicine, neurology services have been repurposed.
In the UK, almost the entire private health stock of beds was requisitioned, providing an additional 8,000 beds. Three Nightingale hospitals were created by NHS England, with the military, to provide an additional 10–11,000 critical care beds, another 1,000-bed hospital created in Scotland, and a 3,000-bed hospital at the Principality Stadium in Cardiff.
Temporary wards were constructed in hospital car parks, and existing wards re-organised to free up 33,000 beds in England and 3,000 in Scotland for COVID-19 patients. A hangar at Birmingham Airport was converted into a 12,000 body mortuary.
Morgues:
New York morgue shortages led the city to propose temporary burial in parks.
Health workers:
There are many factors to the healthcare worker shortage. First, the excess demand due to the pandemic. Second, the specialized nature of care of the critically ill and the time taken to train for new methods of working to prevent cross-contamination, in some cases with new types of protective equipment (PPE).
The third factor is the loss of staff to the pandemic, mostly because they are self-isolating with symptoms (which may be unrelated) or because a household member has symptoms, but also because of long term effects of the disease, or death. This last case applies across the health system and makes it harder to draw staff from non-COVID health workers.
Mitigations being used include recruiting military and sports medics, final-year doctors in training, private sector staff, and re-recruiting retired staff and those who have moved from the medical sector. For non-medical roles, staff have been recruited from other sectors.
Also, automation in health care (process automation solutions, AI-driven medical technologies, ...) can help to reduce medical staff and some equipment such as augmented reality headsets (Microsoft HoloLens, ...) may also help to reduce the possibility of medical staff becoming ill and unable to work an can also reduce the amount of medical staff requirements through labor efficiency gains.
Patient overload:
Facing the prospect of an unmanageable influx of patients both in his city and in others across the United States, New York City mayor Bill de Blasio called on the U.S. federal government to recruit additional medical staff to help meet demand. He suggested recruiting from a pool that includes retired doctors and nurses, private surgeons, and others not actively tending to COVID-19 patients, and he proposed assigning and reassigning them as needed to different parts of the country depending on which cities and states were expected to be hardest hit at any given point in time.
Isolation and trauma:
See also: Mental health during the 2019–20 coronavirus pandemic
As for China, medical staff are self-isolating from families and under high emotional pressure.
Psychological trauma is expected among medical professionals. The AMA has created a guide for healthcare organizations to reduce psychosocial trauma and increase the likelihood of medical staffs.
Sickness and death:
In Italy, at least 50 doctors have died from COVID-19.
In Lombardy, Italy, with the mid-March 2020 outbreak, medical staff reported high level of sick staff. In Lodi, doctors from other services have been called to attend to Covid patients.
In Cremona, the number of patients entries was three times the usual while services were running with 50% of their staff. On 12 March 8% of Italy's 13,382 cases were health workers. It was also reported that between 5 and 10% of deaths were medical staff.
On 17 March, one of the largest hospital of the Bergamo region ran out of ICU beds, patients were flown to other regions by helicopter.
About 14% of Spanish cases are medical staff.
In the USA, about 62,000 HCW have been detected as infected by late May 2020, 291 have died (0.47%).
By late May, Mexico had 11,000 medical staff detected as infected, depleting medical ranks.
Pharmaceutical products:
Critical inhaler medication shortage loomed as coronavirus cases soared in March 2020.
Consumer Goods:
Some daily goods have seen shortages as a result of both disruptions to the supply chains and spikes in demand,, leading to empty shelves for these products in grocery stores. Affected products included toilet paper, hand sanitizer, cleaning supplies and canned food.
Various consumer items were reported in local shortage due to either supply chain disruption or unusual demand, including:
Condoms:
In late March and early April, concerns about a global condom shortage arose after some factories that manufacture condoms were forced to shut down or reduce their operations, in compliance with government-imposed stay-at-home orders, including Malaysia-based Karex, the world's largest condom producer. This has been compounded with delays in delivery due to greater restrictions on imports and freight, such as Egypt's 18-day quarantine on condom shipments.
The possibility of a condom shortage has been particularly concerning for groups focused on contraception and HIV prevention in Africa.
Toilet paper and other paper products:
The pandemic led to shortages of toilet paper in various countries, including Australia, Singapore, Hong Kong, Canada, the United Kingdom and the United States. In March 2020 at numerous stores throughout these countries, shoppers reported empty shelves in both the toilet paper section as well as sections for related products such as paper towels, tissues, and diapers.
Initially, much of this was blamed on panic buying. Consumers began fearing both supply chain disruption and the possibility of being forced into extended quarantines that would prevent them from purchasing toilet paper and related products, despite reassurance from industry and government that neither was likely to occur. As a result, some consumers began hoarding toilet paper, leading to reports of empty shelves, which in turn led to additional fear of a toilet paper shortage that prompted others to hoard toilet paper as well.
The shortage created a massive spike in Google Search, over 4000% for the term "toilet paper" alone. Essential supply locator sites and tools sprouted up everywhere in an effort to assist communities in finding local sources as online retailers were out of stock.
However, by early April 2020, additional factors other than panic buying were identified as causes of the toilet paper shortage. In particular, as a result of stay-at-home orders, people have been spending much less time at schools, workplaces, and other public venues and much more time at home, thus using public toilets less frequently and home toilets more frequently.
This has caused a strain on supply chains, since public toilets and home toilets generally use two different grades of toilet paper: commercial toilet paper and consumer toilet paper, respectively. Georgia-Pacific predicted a 40 percent increase in the use of consumer toilet paper as a result of people staying at home.
Due to differences in roll size, packaging, and supply and distribution networks between the two grades, toilet paper manufacturers are expected to have difficulty shifting production to meet the shift in demand from commercial to home use, leading to lingering shortages even after panic buying subsides. There has also been an increase in the sale of bidets.
Others:
In France, due to closed borders preventing foreign seasonal workers from entering the country, the Minister of Agriculture called for jobless volunteers to contact strawberry farms to help collect the harvest for the usual minimal wage,
Laboratory mice are being culled, and some strains are at risk of shortage due to lockdowns.
In the United States, social distancing has led to shortages of blood donations.
Coins:
A shortage of coins was also reported around the United States as the circulation of coins came to a halt. The normal circulation of coins through banks, business, and consumers was interrupted at every step.
The lockdown closed both banks and businesses. Consumers also shied away from the use of cash when health warnings from the WHO, NIH, and CDC indicated that the use of cash and coin could spread the virus. Therefore, coins stopped moving throughout the economy.
The shortage was further exacerbated when the United States Department of the Treasury authorized the minting of fewer coins earlier in the year to protect workers during the pandemic.
See also:
Supply and Demand:
In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.
Click on any of the following blue hyperlinks for more about Supply and Demand:
- Graphical representations
- Microeconomics
- Other markets
- Empirical estimation
- Macroeconomic uses
- History
- Artificial intelligent buying platforms
- Criticism
- See also:
- Capacity utilization
- Consumer theory
- Deadweight loss
- Economic surplus
- Effective demand
- Effect of taxes and subsidies on price
- Elasticity
- Excess demand function
- Externality
- History of economic thought
- Inverse demand function
- Law of supply
- Neoclassical economics
- Price discovery
- Rationing
- Social cost
- Supply chain
- Supply shock
- Yield management
- Nobel Prize Winner Prof. William Vickrey: 15 fatal fallacies of financial fundamentalism – A Disquisition on Demand Side Economics (William Vickrey)
- Marshallian Cross Diagrams and Their Uses before Alfred Marshall: The Origins of Supply and Demand Geometry by Thomas M. Humphrey
- By what is the price of a commodity determined?, a brief statement of Karl Marx's rival account
- Supply and Demand by Fiona Maclachlan and Basic Supply and Demand by Mark Gillis, Wolfram Demonstrations Project.
Shortages related to the COVID-19 pandemic
Medical materials and other goods shortages caused by the COVID-19 pandemic quickly became a major issue of the pandemic. The matter of pandemic-related shortage has been studied in the past and has been documented in recent events.
On the medical side, shortages of personal protective equipment such as medical masks, gloves, face shields, sanitizing products, are also joined by potential shortage of more advanced devices such as hospital beds, Intensive care unit (ICU) beds, oxygen therapy, ventilators and ECMO (Extracorporeal membrane oxygenation) devices.
Human resources, especially in terms of medical staff, may be drained by the overwhelming extent of the epidemic and associated workload, together with losses by contamination, isolation, sickness or mortality among health care workers. Territories are differently equipped to face the pandemic.
Various emergency measures have been taken to ramp up equipment levels such as purchases, while calls for donations, local 3D makers, volunteer staffing, mandatory draft, or seizure of stocks and factory lines have also occurred.
Bidding wars between different countries and states over these items are reported to be a major issue, with price increases, orders seized by local government, or cancelled by selling company to be redirected to higher bidder. In some cases, medical workers have been ordered to not speak about these shortages of resources.
While public health advocates and officials have encouraged to flatten the curve by social distancing, the unmitigated ICU needs would be about 50 times the available ICU beds and ventilators capacity of most developed countries. There have also been calls to increase healthcare capacity despite shortages.
Background:
Long term and structural:
See also: Pandemic predictions and preparations prior to COVID-19
Following warnings and increased preparedness in the 2000s, the 2009 swine flu pandemic led to rapid anti-pandemic reactions among Western countries.
The H1N1/09 virus strain, with mild symptoms and low lethality, eventually led to a backlash over public sector over-reactiveness, spending, and the high cost/benefit of the 2009 flu vaccine.
In the following years, national strategic stockpiles of medical equipment were not systematically renewed. In France, a €382 million spending for H1N1 vaccines and masks was widely criticized. French health authorities decided in 2011 to not replace their stocks, to reduce acquisitions and storage costs, to rely more on supplies from China and just-in-time logistics, and to distribute the responsibility to private companies on an optional basis.
In 2013, in order to save cost, a law moved responsibility for personal protective equipment (PPE) stockpiles from the French government to public and private enterprises, which had to plan the security of their workers, without any verification mechanisms in place.
National manufacturers could not compete with Chinese manufacturers' prices on this new open market. The former strategic masks producer closed in 2018 while the French strategic stockpile dropped in this period from one billion surgical masks and 600 million FFP2 masks in 2010 to 150 million and zero, respectively, in early 2020.
France has been called a case study of Juan Branco, author of a critical book on French President Emmanuel Macron's rise to power, argued that selfish quest of power and loyalty in leadership led young and unexperienced people to be in charge of nation-wide health care reforms via blind accounting analysis and management.
France has been cited as a case study for countries now considering a U-turn over the past two decades of globalization of health supplies to gain lower immediate costs. The same approach was taken in the United States. The U.S. Strategic National Stockpile's stock of masks used against the 2009 flu pandemic was not replenished, neither by the Obama administration nor by the Trump administration.
American masks manufacturer Mike Bowen of Prestige Ameritech had been warning for years that the USA mask supply chain was too dependent on China. As Juan Branco for France, Former US President Obama denounced short-term individualistic mindset as negatively affecting public decision making and preparedness.
According to a report in the New York Times, Russian agents spent decades promoting debunked public health scares to increase mistrust toward the Federal government of the United States and its officials at home and abroad, but also to damage American science, a foundation of US national prosperity. These efforts have been linked to lower support for public health programs, anti-vaccines scares and illnesses spread, and weaker global pandemic preparedness prior to the 2020 pandemic.
Several public (World Health Organization (WHO), World Bank, Global Preparedness Monitoring Board) and private initiatives raised awareness about pandemic threats and needs for better preparedness.
Since 2015, Bill Gates has been warning about needing to prepare for a global pandemic. International divisions and lack of suitable collaboration limited preparedness. WHO's pandemic influenza preparedness project had a US$39 million two-year budget, out of WHO's 2020–2021 budget of US$4.8 billion. While WHO gives recommendations, there is no sustained mechanism to review countries' preparedness for epidemics and their rapid response abilities.
According to international economist Roland Rajah, while there are guidelines, local action depends on local governance. Andy Xie, writing in the South China Morning Post, argued that ruling elites, obsessed with economic metrics, failed to prepare their communities against well-known pandemic risks.
Tax systems in the early twenty-first century, by favoring the largest corporations with anti-competitive practices and lower investment rates into innovation and productions, favored corporate actors and corporate profits, increasing the risk of shortages and weakening the society ability to respond to a pandemic.
Early outbreaks in Hubei, Italy, and Spain showed that several wealthy countries' health care systems were overwhelmed. In developing countries with weaker medical infrastructure, oxygen therapy, equipment for intensive care bed and other medical needs, shortages were expected to occur earlier.
Tests:
See also: COVID-19 testing
Testing shortage is a key element preventing authorities from measuring the true extent of current epidemic spread. Germany and Korea's anticipative and aggressive testing strategies has helped to reduce the measured fatality rate. Germany started producing and stockpiling COVID-19 tests as soon as January 2020.
Diagnostic tests:
Reagents:
In Ireland and the UK, in late March and early April, reagent shortages limited the number of tests. By March, insufficient amounts of reagent became a bottleneck for mass testing in the European Union (EU), United Kingdom (UK) and the United States (US).
This has led some authors to explore sample preparation protocols that involve heating samples at 98 °C (208 °F) for 5 minutes to release RNA genomes for further testing.
In UK, on 1 April, the UK government confirmed that a total of 2,000 NHS staff had been tested for coronavirus since the outbreak began, but Cabinet Office Minister Michael Gove said a shortage of chemicals needed for the test meant it was not possible to screen the NHS's 1.2 million workforce.
Gove's statement was contradicted by the Chemical Industries Association, which said there was not a shortage of the relevant chemicals and that at a meeting with a business minister the week before the government had not tried to find out about potential supply problems.
There were also reagent shortages in the United States. Some hospitals manufactured their own reagents from publicly-available recipes.
Swabs:
A feared shortage of swabs in Iceland was averted when stocks were found to bridge the gap until more arrived from China. There were no swabs in the US Strategic National Stockpile, and the US had shortages, despite the one pre-pandemic domestic manufacturer increasing production to 1 million swabs per day in March, and government funding for it to build a new factory in May. Shortages also arose in the UK, but were resolved by 2 April.
In-house manufacturing:
The US FDA licensed a swab-free saliva test and more new swab designs, including 3-D printed versions which are now being manufactured in the labs, hospitals, and other medical facilities using the swabs.
In the US, general-use nasal swabs are Class I medical devices, and are not approved by the FDA. The NIH said that they should follow FDA labelling requirements, be made in a facility registered and listed with the FDA, and pass a publicly-available safety testing protocol.
The material must also be safe; an already-approved autoclavable surgical-grade plastic can be used. The full development process can take as little as two weeks. 3-D-printed swabs increased the demand for suitable 3-D printers.
Some 3-D-printed swab designs are publicly-licensed under Creative Commons licenses, and others are patented, but with the 3-D printing files freely available on request to permitted facilities during the epidemic.
Personal protective equipment:
Generalities:
Although the vast majority of PPE is produced in China, domestic supplies were insufficient. The Chinese government took control of stocks from foreign enterprises whose factories produced these goods. Medicon, whose three factories produced such supplies in China, saw their stocks seized by the Communist Party-led government.
Figures from China Customs show that some 2.46 billion pieces of epidemic prevention and control materials had been imported between 24 January and 29 February, including 2.02 billion masks and 25.38 million items of protective clothing valued at 8.2 billion yuan ($1 billion).
The Press reported that the China Poly Group, together with other Chinese companies and state-owned enterprises, had an important role in scouring markets abroad to procure essential medical supplies and equipment for China. Risland (formerly Country Garden) sourced 82 tons of supplies, which were subsequently airlifted to Wuhan.
Greenland Holdings also sourced bulk supplies of medical consumables such as surgical masks, thermometers, antibacterial wipes, hand sanitisers, gloves and paracetamol for shipping to China. The mass procurement of supplies at wholesale and retail levels by Chinese companies to help their compatriots back home have contributed to shortages of products in western countries where these Chinese companies operate. On 24 March the Australian Prime Minister Scott Morrison announced restrictions on such activities.
Given that the global supply of PPE is insufficient, and following these Chinese measures, the World Health Organization (WHO) recommended in February 2020 minimizing the need for PPE through telemedicine; physical barriers, such as:
- clear windows;
- allowing only those involved in direct care to enter a room with a COVID-19 patient;
- using only the PPE necessary for the specific task;
- continuing use of the same respirator without removing it while caring for multiple patients with the same diagnosis;
- monitoring and coordinating the PPE supply chain;
- and discouraging the use of masks for asymptomatic individuals.
Quality issues exacerbating shortages:
In late-March/early-April 2020, as Western countries were in turn dependent on China for supplies of masks and other equipment, European politicians e.g. the EU chief diplomat Josep Borrell accused China of a soft-power play to influence world opinion.
Also, some of the supplies sent to Spain, Turkey, and the Netherlands were rejected as being faulty. Dutch health ministry issued a recall of 600,000 face masks from a Chinese supplier on 21 March that did not fit properly and whose filters did not work as intended despite them having a quality certificate.
The Spanish government discovered that 60,000 out of 340,000 test kits from a Chinese manufacturer did not accurately test for COVID-19. The Chinese Ministry of Foreign Affairs responded that the customer should "double-check the instructions to make sure that you ordered, paid for and distributed the right ones. Do not use non-surgical masks for surgical purposes".
In mid-May, the European Commission suspended an order of 10 million Chinese masks destined for member states and the UK after two countries reported having received sub-standard products. The masks had been ordered by the EU's executive arm and was set to be distributed in six weekly instalments.
After a first batch of 1.5 million masks was distributed to 17 of the 27 member states and Britain, Poland said the 600,000 items they received did not have European certificates nor did they comply with the necessary standard. Commission health spokesman Stefan De Keersmaecker vowed to investigate and take the necessary action.
By April 2020, studies revealed that a significant percentage of those with coronavirus were asymptomatic, allowing the virus to spread undetected. Therefore, the CDC recommended "wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain".
Sanitizing products:
Hand sanitizer went out of stock in many areas, causing price gouging. In response, brewers and distillers began to produce hand sanitizer.
Protective gear:
In the United States, shortages were such that some nurses at one New York City hospital resorted to wearing garbage bags as an alternative to unavailable protective clothing.
In light of the shortages of traditional protective gear, small businesses throughout the United States have been retooling to produce makeshift protective devices, often created through open source design initiatives in which manufacturers donate the gear to hospitals.
An example is the COVID-19 Intubation Safety Box, first used by hospitals in Taiwan, which is an acrylic cube placed over an infected patient's torso, with openings that allow ventilator intubation and extubation while minimizing contaminated droplet risk to healthcare workers.
CNBC reported that E-commerce platform Amazon banned sales of N95 face masks in the name of price gouging; the shortages of N95 protective gear became even more serious. Amazon Third party Golden Tree Supply turn to Canadian E-commerce platform Shopify to keep on supplying N95 face masks to the people of United States.
In March, The Doctors' Association UK alleged that shortages were covered-up through intimidating emails, threats of disciplinary action and in two cases being sent home from work.
Some doctors were disciplined after managers were annoyed by material they had posted online regarding shortages of surgical masks, goggles, visors and especially gowns in many British National Health Service hospitals.
On 18 April, the communities secretary, Robert Jenrick, reported that 400,000 protective gowns and other PPE were on their way to the U.K. from Turkey. One day later, these were delayed; this led hospital leaders to directly criticise the government for the first time during the pandemic.
The shipment arrived at Istanbul airport en route to the U.K. two days after ministers said that the PPE would appear in the country. Only 32,000 of the order arrived (less than one-tenth), despite the NHS making a down payment to secure its arrival on 22 April. Eventually, these all had to be returned to Turkey as they did not meet NHS standards.
In July, U.S. Customs and Border Protection (CBP) banned products by the Malaysia-based Top Glove and its subsidiary TG Medical due to alleged violations of workers' rights including "debt bondage, excessive overtime, retention of identification documents, and abusive working and living conditions." Most of the world's glove supply comes from Malaysia.
Facial masks:
See also:
Early epidemic in China:
As the epidemic accelerated, the mainland market saw a shortage of face masks due to increased public demand. In Shanghai, customers had to queue for nearly an hour to buy a pack of face masks; stocks were sold out in another half an hour.
Hoarding and price gouging drove up prices, so the market regulator said it would crack down on such acts. In January 2020, price controls were imposed on all face masks on Taobao and Tmall.
Other Chinese e-commerce platform – JD.com, Suning.com, Pinduoduo – did likewise; third-party vendors would be subject to price caps, with violators subject to sanctions.
National stocks and shortages:
In 2006, 156 million masks were added to the U.S. Strategic National Stockpile in anticipation of a flu pandemic. After they were used against the 2009 flu pandemic, neither the Obama administration nor the Trump administration renewed the stocks. By 1 April, U.S.'s Strategic National Stockpile was nearly emptied.
In France, 2009 H1N1-related spending rose to €382 million, mainly on supplies and vaccines, which was later criticized. It was decided in 2011 to not replete its stocks and rely more on supply from China and just-in-time logistics. In 2010, its stock included 1 billion surgical masks and 600 million FFP2 masks; in early 2020 it was 150 million and zero, respectively.
While stocks were progressively reduced, a 2013 rational stated the aim to reduce costs of acquisition and storage, now distributing this effort to all private enterprises as an optional best practice to ensure their workers' protection. This was especially relevant to FFP2 masks, more costly to acquire and store.
As the COVID-19 pandemic in France took an increasing toll on medical supplies, masks and PPE supplies ran low and caused national outrage. France needs 40 million masks per week, according to French president Emmanuel Macron. France instructed its few remaining mask-producing factories to work 24/7 shifts, and to ramp up national production to 40 million masks per month. French lawmakers have opened an inquiry on the past management of these strategic stocks.
In the wake of the 2020 COVID-19 pandemic and widespread complaints by nurses and other health care workers about lack of N95 masks and proper protocols, National Nurses United, the largest organization of registered nurses in the United States, filed over 125 complaints with Occupational Safety and Health Administration (OSHA) offices in 16 states charging hospitals with failing to comply with laws mandating safe workplaces in which COVID-19 nurses should be provided N-95 masks.
The World Health Organization (WHO) called for industry and governments to increase manufacturing by 40% to meet global demands on 3 March 2020 and they also released a document on 6 April 2020 with recommendations for the rational use of PPE. This document was intended for those in the health care and community settings, including the handling of cargo.
This global PPE shortage issue soon became a subject of interest for the concerned public. Academics from the likes of Science Foundation Ireland researched how we can find a solution and avoid this shortage in the future. Simultaneously, independent initiatives and online platforms like [https://PPE Needed.com PPE Needed] were started to provide an immediate solution. UNICEF has also taken steppes to mitigate this current risk and anticipate near-term effects of COVID-19 as well as the access to PPE suppliers.
Competition for supplies:
Countries such as Britain, France, Germany, South Korea, Taiwan, China, India, and others initially responded to the outbreak by limiting or banning exports of medical supplies to protect their citizens, including rescinding orders that other nations already secured.
Germany blocked exports of 240,000 masks bound for Switzerland and also stopped similar shipments to the Central Bohemian Region as well. One French company, Valmy SAS, was forced to block an order for PPE to be sent to the UK, after the company's UK representative told CNN that the order had been blocked by customs officials at the French coast.
Turkey blocked a shipment of ventilators bought by two regional Spanish governments from a Turkish company, citing the risk of a shortage at home in holding onto the ventilators; 116 of the ventilators were later released.
As the pandemic began to worsen, governments began employing strong-arm tactics including even surreptitious means to obtain medical supplies necessary to fight the coronavirus, either through paying more cash to reroute or seizing such equipment.
Slovakian prime minister Peter Pellegrini said the government was preparing cash worth 1.2 million euros ($1.3 million) to purchase masks from a contracted Chinese supplier. He then said "However, a dealer from Germany came there first, paid more for the shipment, and bought it."
Ukraine lawmaker Andriy Motovylovets also stated that "Our consuls who go to factories find their colleagues from other countries (Russia, USA, France, Germany, Italy, etc) who are trying to obtain our orders. We have paid upfront by wire transfer and have signed contracts.
But they have more money, in cash. We have to fight for each shipment." San Marino authorities said they arranged a bank transfer to a supplier in Lugano, Switzerland, to pay for a half-million masks to be shared with Italian neighbous. However, the truck came in empty, because one or several unidentified foreign buyers offered more instead.
Germany snatched 830,000 surgical masks that were arriving from China and destined for Italy. Although Italian authorities managed to persuade Germany to release them, no one in Germany, however, found the masks they seized at all. 1.5 million face masks that were supposed to be delivered from Spain to Slovenia were seized by German agents.
French guards confiscated lorries filled with 130,000 face masks and boxes of sanitisers bound for the UK in what was described as a "despicable act" by the British government.
Italian customs police hijacked some 800,000 imported masks and disposable gloves that were about to be sent to Switzerland.
On 22 March, an Italian newspaper said that the 680,000 face masks and ventilators it ordered from China were confiscated by the Czech Republic's police. They carried out an anti-trafficking operation in which they seized equipment from a warehouse of a private company in northern town of Lovosice.
According to Czech authorities, the donation from China represented only just over 100,000 masks. Czech government sent 110,000 items to Italy as compensation. It's unclear how the masks ended up in Lovosice. Czech Foreign Minister Tomáš Petříček told AFP: "Lovosice is not quite en route from China to Italy."
Valérie Pécresse, regional counselor of Île-de-France, alleged that some Americans, in their aggressive search for stocks, had made tarmac bids for stocks of masks – sight unseen – awaiting loading onto transporters, paying 3 times the price in cash.
However, Politico Europe reported the French claim as "unsubstantiated" and the U.S. Embassy in Paris stated that "The United States government has not purchased any masks intended for delivery from China to France. Reports to the contrary are completely false."
On 3 April, Berlin politician Andreas Geisel accused U.S. agents of appropriating a shipment of 200,000 3M-made face masks meant for Berlin police from the airport in Bangkok. However, these claims were proven false, as 3M revealed it "has no records of an order for respiratory masks from China for the Berlin police" and Berlin police later confirmed that the shipment was not seized by U.S. authorities, but was said to have simply been bought at a better price, widely believed to be from a German dealer or China.
This revelation outraged the Berlin opposition, whose CDU parliamentary group leader Burkard Dregger accused Geisel of "deliberately misleading Berliners" in order "to cover up its own inability to obtain protective equipment". FDP interior expert Marcel Luthe said "Big names in international politics like Berlin's senator Geisel are blaming others and telling US piracy to serve anti-American clichés."
Politico Europe reported that "the Berliners are taking a page straight out of the Trump playbook and not letting facts get in the way of a good story." The Guardian also reported that "There is no solid proof Trump [nor any other American official] approved the [German] heist".
On 3 April, Jared Moskowitz, head of Florida Division of Emergency Management, accused the American company 3M of selling N95 masks directly to foreign countries for cash instead of the United States.
Moskowitz stated that 3M agreed to authorise distributors and brokers to represent they were selling the masks to Florida, but instead his team for the last several weeks "get to warehouses that are completely empty." He then said the 3M authorized U.S. distributors later told him the masks Florida contracted for never showed up because the company instead prioritized orders that come in later, for higher prices, from foreign countries (including Germany, Russia, and France).
As a result, Moskowitz highlighted the issue on Twitter, saying he decided to "troll" 3M. Forbes reported that "roughly 280 million masks from warehouses around the U.S. had been purchased by foreign buyers [on 30 March 2020] and were earmarked to leave the country, according to the broker – and that was in one day", causing massive critical shortages of masks in the U.S.
Using the Defense Production Act, the Trump administration ordered 3M to stop selling US-produced masks to Canada and Latin America, a move the company said would cause "significant humanitarian implications" and could cause those countries to retaliate, resulting in a net decrease of supplies in the US.
On 3 April, the Swedish health care company Mölnlycke announced that France had seized millions of face masks and gloves that the company imported from China to Spain and Italy. The company's general manager, Richard Twomey, denounced France for "confiscat[ing] masks and gloves even though it was not [its] own. This is an extremely disturbing, unbecoming act." Mölnlycke estimated a total of "six million masks was seized by the French.
All had been contracted for, including a million masks each for France, Italy and Spain. The rest were destined for Belgium, the Netherlands, Portugal and Switzerland, which has special trading status with the EU." Sweden's foreign ministry stated to Agence France-Presse that "We expect France to promptly cease the requisition of medical equipment and do what it can to ensure that supply chains and the transportation of goods are secured. The common market has to function, particularly in times of crisis."
On 24 April, San Francisco Mayor London Breed complained that her city's orders for PPE were diverted to other cities and countries. She said "We’ve had issues of our orders being relocated by our suppliers in China. For example, we had isolation gowns on their way to San Francisco and they were diverted to France. We’ve had situations when things we’ve ordered that have gone through Customs were confiscated by FEMA to be diverted to other locations."
Trade in medical supplies between the United States and China has also become politically complicated. Exports of face masks and other medical equipment to China from the United States (and many other countries) spiked in February, according to statistics from Trade Data Monitor, prompting criticism from the Washington Post that the United States government failed to anticipate the domestic needs for that equipment.
Similarly, The Wall Street Journal, citing Trade Data Monitor to show that China is the leading source of many key medical supplies, raised concerns that US tariffs on imports from China threaten imports of medical supplies into the United States.
Reuse of Masks:
Shortage in single-use medical mask and field reports of reuse lead to the question of which process could properly sanitize these PPE without altering their filtering capacity.
FFP2 masks can be sanitized by 70 °C vapor allowing reuses. Use of alcohol is discouraged since it alters N95 mask microfibers' static charge which helps filtration. Chlorine is also discouraged since its fumes may be harmful. Authors are warning against reuses by non-professionals, pointing out that even the best scored methods can degrade the mask if not performed properly.
A Singaporean study found no contamination on mask after brief care to COVID-19 patients, suggesting masks could be reused for multiple patients cares. A portion of SARS-CoV-2 virus can survive long exposure to 60 °C.
Makers have designed Arduino-controlled disinfection boxes, with temperature controls, to safely reuse surgical and N95 masks.
Gas disinfection allows 10 reuse.
DIY masks:
Following N95 masks shortages, volunteers created 3D printed "NanoHack" alternative. This printed mask allows to use hand-cut surgical mask as fine-particle filters.
Given the scarcity of masks and ambiguity on their efficiency, individuals and volunteers have started to produce cloth masks for themselves or for others. Various designs are shared online to ease creation.
Medical face shield:
Reacting to shortage of face shield, volunteers from the maker community with 3D printing abilities initiated an effort to produce face-shields for hospital staff.
3D printer manufacturers:
At the early stage, a few 3D printer manufacturers published their designs.
On 14 March, Budmen Industries, a custom 3D printer maker in New York, created a face shield design and produced their first 50 shields with a plan to donate to the Onondaga County to use in a COVID-19 testing site.
The company published their design and it had more than 3,000 downloads within a week. By the end of the month, the company and its partner made 5,000 face shields with global requests for 260,000 units.
On 16 March, Prusa Research, a Czech 3D printer manufacturer, started working on a face shield design for medical use . The design was approved by the Czech Ministry of Health and went to a field test and a large scale production within 3 days.
The company published the design for people to make face shields to support local efforts. The design was downloaded in a large number by makers around the world. By the end of March, the company employed 500 employees to work on the 10,000 shields order. Their design was downloaded 40,000 times.
Local volunteers:
As the shortage of personal protective equipment in New York City hospitals got into a critical stage, volunteers started making face shields using the Budmen design on 20 March.
More efforts were started by various groups from hobbyists, academics, to experts. Many designs had been created and groups were formed to supply face shields to local hospitals.
On 24 March, while the epidemic was expanding, popular French 3D maker and YouTuber Heliox announced on 24 March that she would produce face shields for free, building upon another maker's design. She was quickly contacted by local hospitals, health centers and other medical professionals asking for rapid delivery of face shields. The visible popularity of her initiative caused other 3D makers to join the effort and offer their help in other regions to connect health facilities with nearby makers.
On 30 March, The New York Times published a video on COVID-19-related shortages and healthcare workers' DIY solutions.
Government agencies:
On 23 March 2020, United States Food and Drug Administration (FDA), United States Department of Veterans Affairs (VA), and National Institutes of Health (NIH) entered into a memorandum of understanding to form a public-private partnership with America Makes, a non-profit organization, to test designs of 3D printed personal protective equipment including face shields.
The agreement was to have NIH to provide the 3D Print Exchange system to solicit open designs, VA to perform testing in clinical settings, FDA to participate in the review process and America Makes to coordinate with makers to produce the approved designs for healthcare facilities. As of 18 June 13 face shields have been reviewed as appropriate for clinical use.
On 9 April 2020, FDA issued an emergency use authorization that included an authorization for the use of face shields by health care personnel. FDA laid out the details of the conditions, and waiver of requirements for face shield makers in a letter on 13 April 2020.
Companies:
Apple Inc. announced on 5 April they would produce 1 million face shields per week to be sent to U.S. hospitals.
By mid April, many large companies such as Hewlett-Packard, Ford Motor Company, and Blue Origin had joined the efforts to make face shields. Even sports equipment manufacturers such as Bauer Hockey joined in and started making face shields for medical workers.
Medical care devices:
The availability of critical care beds or ICU beds, mechanical ventilation and ECMO devices generally closely associated with hospital beds has been described as a critical bottleneck in responding to the ongoing COVID-19 pandemic. The lack of such devices dramatically raises the mortality rate of COVID-19.
Oxygenation mask:
Popular snorkelling masks have been adapted into oxygen dispensing emergency respiratory masks via the usage of 3D printed adapters and minimal modifications to the original mask.
According to Italian laws relative to medical cares where the project has occurs, usage by the patient requires a signed declaration of acceptance of use of an uncertified biomedical device. The project provides the 3D files for free, as well as 2 forms to register hospitals in need and 3D makers willing to produces adapters.
In France, the main sportswear and snorkeling masks producer Decathlon has locked down its mask sales to redirect them toward medical staff, patients and 3D makers. An international collaboration including Decathlon, BIC, Stanford, and other actors is on track to scale up production for international needs.
Intensive care beds:
See also: List of countries by hospital beds
Both rich countries and developing countries have or will face intensive care beds shortages, but the situation is expected to be more intense in developing countries due to lower equipment levels.
In early March, the UK government supported a strategy to develop natural herd immunity, drawing sharp criticism from medical personnel and researchers. Various forecasts by Imperial College COVID-19 Response Team, made public on 16 March, suggested that the peak number of cases in the UK would require between 100 and 225 CCBs / 100,000 inhabitants, if proper mitigation or no mitigation strategies are put into force, respectively.
These requirements would both exceed the UK's current capacities of 6.6–14 CCB / 100,000 inhabitants. In the best case scenario, the peak caseload would require 7.5 times the current number of available ICU beds. Around 16 March, the UK government changed trajectory toward a more standard mitigation/suppression strategy.
In France, around 15 March, the Grand Est region was the first to express the scarcity of CCB limiting its handling of the crisis. Assistance-publique Hôpitaux de Paris (AP-HP), which manages most hospitals in the French capital area (~10 million inhabitants), reported the need for 3,000–4,000 ICUs. Current capacity is reported to be between 1500[ and 350, depending on the source.
In France, given shortages of ICU hospital beds in Grand Est and Ile-de-France regions, severe but stable patients with ARS and breathing assistance have been moved toward other regional medical centers within France, Germany, Austria, Luxembourg or Switzerland.
Mechanical ventilation:
Mechanical ventilation has been called "the device that becomes the decider between life and death" for COVID-19 patients because 3.2% of detected cases need ventilation during treatment. Ventilators shortage is endemic in the developing world.
In case of shortage, some triage strategies have been previously discussed. One strategy is to grade the patient on dimensions such as: prospects for short-term survival; prospects for long-term survival; stage of life-related considerations; pregnancy and fair chance. The frequent 15 to 20 day duration of the intubation to recover is an important factor in the ventilator's shortage.
An important way of reducing demand for ventilators is the use of CPAP devices as a first resort. For this reason CPAP devices themselves have become a scarce item.
Official assessments:
In the 2000s, the U.S. CDC estimated a national shortage of 40–70,000 ventilators in case of pandemic influenza. From this assessment resulted Project Aura, a public-private initiative to design a frugal, $3,000 mechanical ventilator, simple to mass-produce, and able to supply the Strategic National Stockpile.
Newport Medical Instruments was granted the contract, designing and prototyping (2011) the frugal ventilators to CDC officials, and expecting to later profit from the product by moving into the private market where competing devices were sold for $10,000.
In April 2012, US Health and Human Services officials confirmed to the US Congress that the project was on schedule to file for market approval in late 2013, after which the device would go into mass-production. In May 2012, US$12 billion medical conglomerate Covidien, a top actor of the mechanical ventilation market, acquired Newport for $100 million.
Covidien soon asked to cancel the Project Aura contract since it wasn't profitable enough. Former Newport executives, government officials and executives at rival ventilator companies suspect Covidien acquired Newport to prevent the frugal $3,000 ventilator design from disturbing its profitable ventilation operation.
Covidien merged in 2015 into Medtronic. Project Aura looked for and then signed a new contract with Philips healthcare. In July 2019, the FDA signed for 10,000 units of their Trilogy Evo portable ventilator, to be delivered to the SNS by mid-2020.
On 25 March 2020, Andrew Cuomo made a detailed 1-hour COVID-19 press conference, emphasizing an expectation of a severe shortage of ventilators, and their importance in sustaining life in severe COVID-19 cases.
Cuomo said New York state would ultimately need about 30,000 ventilators to handle the influx, while having only 4,000 as of 25 March; on the 27th, President Trump expressed doubt about the need, saying "I don't believe you need 40,000 or 30,000 ventilators," and resisted calls to force businesses to produce them.
Later on the 27th, the President acceded to calls to assist states in ventilator procurement, using the Defense Production Act, although fears remain that procurement will not happen in time to prevent severe shortages.
Industrial suppliers:
In Europe, the company Löwenstein Medical producing 1500 ICU-level ventilators and 20,000 home-level ventilator per year for France alone, pointed out of the current high demand and production shortage.
Based in Europe, all their components are European and not relying on the Chinese supply chain. As for production ramp-up, it was suggested to increase the production of home-level ventilators, more basic and which can be assembled in half an hour, yet able to support patients through acute respiratory distress syndrome.
The current bottleneck is mainly a question of qualified human resources. In business as usual, ICU-level ventilators are to be renewed every 10 to 15 years. Due to the coronavirus pandemic, Germany and other European countries have started to take control over the company's supply.
In China, local manufacturers are racing to answer the demand. Medtronic made ventilator design specifications publicly available but licensing questions remain unclarified.
Improvised ventilators:
See also: Open-source ventilator
In the United Kingdom, despite a lack of ventilators being previously identified in Exercise Cygnus, there was a shortage of them during COVID-19 with the government stockpiles proving to be insufficient.
In March, the British government called for industry to get involved with making ventilators for the NHS, with Dyson and Babcock revealing plans on creating 30,000 medical ventilators (this amount was seen as necessary based on modelling from the time from China).
The Ventilator Challenge involved companies such as Airbus, Rolls-Royce and Ford. This was seen as impractical at the time; the type of ventilators suggested by the government to these companies were crude and would not have been able to be used in hospitals, and none of the companies involved reached the final stages of testing and the majority have proved surplus to requirements in hindsight.
3D makers have been working on various low-cost alternative ventilation devices or adaptations.
Anesthetist Dr. Alan Gauthier from Ontario, Canada, turned one single-patient ventilator into a nine-patient device thanks to a 2006 YouTube video by 2 doctors from Detroit. The method uses T-shaped tubes to split airflow and multiply the number of patients provided with respiratory support.
In Ireland, volunteers started the Open Source Ventilator Project in collaboration with medical staff.
In Italy, a local journalist and journal director Nunzia Vallini of the Giornale di Brescia (Brescia Daily) was informed that nearby Chiani hospital was running out of valves which mix oxygen with air and are therefore a critical part of reanimation devices. The valves supplier was itself out of stock leading to patient deaths.
Vallini contacted FabLab founder Massimo Temporelli, which invited Michele Faini, an expert in 3D print manufacturing and a research and development designer at Lonati SpA to join a 3D printing effort.
When the supplier didn't wish to share the design's specifics, they reverse-engineered the valves and produced a limited not-for-profit series for local hospitals. To satisfy biomedical requirements that can withstand periodic sanitation, Lonati SpA used their SLS 3D printers to print about 100 valves in Nylon PA12.
Faini and Temporelli still acknowledge the limitations of their production: 3D printing not being able to reach the quality and sterilized context of the original valves and manufacturing process. Contrary to rumous online, the valves don't cost US$10,000 each and the original manufacturer did not threaten to sue the 3D printers team.
Hackers of the Ventilator Project have brainstormed to propose to re-purposing CPAP machines (sleep-apnea masks) as ventilators, hacking single ventilators to split air-flow and treat multiple patients, and using grounded aircraft as treatment facilities to leverage their one-oxygen-mask-per-seat infrastructure.
Engineers familiar with devices design and production, medical professionals familiar existing respiratory devices and lawyers able to navigate FDA regulations if the needs arise are key participants among the 350 volunteers involved. The central avenue of exploration is to ditch away from the most advanced features of modern mechanical ventilation, which includes layers of electronics and patients monitoring systems, to focus solely on assisted respiration by pressured airflow.
The group is, by example, looking for an old Harry Diamond Laboratories "emergency army respirator" model to study. While hopeful they will be able to submit the viable and mass-producible design, several questions linger at this later levels: mass production line, FDA approval, personnel training, personnel availability, and eventually actual needs on the battlegrounds to come.
An MIT team has also designed an emergency ventilator.
ECMOs:
Extracorporeal membrane oxygenation are devices able to replace both the lungs and the patient's heart. As of 6 February 2020, the medical community was encouraged to set up criteria for ECMO patients triage.
Facilities:
Hospitals:
As Wuhan's situation worsened and to assist the overwhelmed Central Hospital of Wuhan and Dabie Mountain Regional Medical Centre, China built two emergency field hospitals within a few days: the Huoshenshan Hospital and Leishenshan Hospital. The hospitals were progressively phased out in March 2020.
On 23 March, Lieutenant General Todd T. Semonite, Chief of the U.S. Army Corps of Engineers, signaled an ongoing effort to lease existing facilities such as hotels, college dormitories, and a larger hall to temporarily convert them into medical facilities.
On 16 March, French President Emmanuel Macron announced a military hospital would be set up in the Grand-Est region, to provide up to 30 ICU beds. The hospital was being tested 7 days later.
By 8 March, Lombardy had created 482 new ICU beds. Lodi's ICU director reported that every single square metre, every single aisle of the hospital had been re-purposed for severe COVID-19 patients, increasing ICU beds from 7 to 24. In Monza, 3 new wards of 50 beds each were opened on 17 March. In Bergamo, gastrology, internal medicine, neurology services have been repurposed.
In the UK, almost the entire private health stock of beds was requisitioned, providing an additional 8,000 beds. Three Nightingale hospitals were created by NHS England, with the military, to provide an additional 10–11,000 critical care beds, another 1,000-bed hospital created in Scotland, and a 3,000-bed hospital at the Principality Stadium in Cardiff.
Temporary wards were constructed in hospital car parks, and existing wards re-organised to free up 33,000 beds in England and 3,000 in Scotland for COVID-19 patients. A hangar at Birmingham Airport was converted into a 12,000 body mortuary.
Morgues:
New York morgue shortages led the city to propose temporary burial in parks.
Health workers:
There are many factors to the healthcare worker shortage. First, the excess demand due to the pandemic. Second, the specialized nature of care of the critically ill and the time taken to train for new methods of working to prevent cross-contamination, in some cases with new types of protective equipment (PPE).
The third factor is the loss of staff to the pandemic, mostly because they are self-isolating with symptoms (which may be unrelated) or because a household member has symptoms, but also because of long term effects of the disease, or death. This last case applies across the health system and makes it harder to draw staff from non-COVID health workers.
Mitigations being used include recruiting military and sports medics, final-year doctors in training, private sector staff, and re-recruiting retired staff and those who have moved from the medical sector. For non-medical roles, staff have been recruited from other sectors.
Also, automation in health care (process automation solutions, AI-driven medical technologies, ...) can help to reduce medical staff and some equipment such as augmented reality headsets (Microsoft HoloLens, ...) may also help to reduce the possibility of medical staff becoming ill and unable to work an can also reduce the amount of medical staff requirements through labor efficiency gains.
Patient overload:
Facing the prospect of an unmanageable influx of patients both in his city and in others across the United States, New York City mayor Bill de Blasio called on the U.S. federal government to recruit additional medical staff to help meet demand. He suggested recruiting from a pool that includes retired doctors and nurses, private surgeons, and others not actively tending to COVID-19 patients, and he proposed assigning and reassigning them as needed to different parts of the country depending on which cities and states were expected to be hardest hit at any given point in time.
Isolation and trauma:
See also: Mental health during the 2019–20 coronavirus pandemic
As for China, medical staff are self-isolating from families and under high emotional pressure.
Psychological trauma is expected among medical professionals. The AMA has created a guide for healthcare organizations to reduce psychosocial trauma and increase the likelihood of medical staffs.
Sickness and death:
In Italy, at least 50 doctors have died from COVID-19.
In Lombardy, Italy, with the mid-March 2020 outbreak, medical staff reported high level of sick staff. In Lodi, doctors from other services have been called to attend to Covid patients.
In Cremona, the number of patients entries was three times the usual while services were running with 50% of their staff. On 12 March 8% of Italy's 13,382 cases were health workers. It was also reported that between 5 and 10% of deaths were medical staff.
On 17 March, one of the largest hospital of the Bergamo region ran out of ICU beds, patients were flown to other regions by helicopter.
About 14% of Spanish cases are medical staff.
In the USA, about 62,000 HCW have been detected as infected by late May 2020, 291 have died (0.47%).
By late May, Mexico had 11,000 medical staff detected as infected, depleting medical ranks.
Pharmaceutical products:
Critical inhaler medication shortage loomed as coronavirus cases soared in March 2020.
Consumer Goods:
Some daily goods have seen shortages as a result of both disruptions to the supply chains and spikes in demand,, leading to empty shelves for these products in grocery stores. Affected products included toilet paper, hand sanitizer, cleaning supplies and canned food.
Various consumer items were reported in local shortage due to either supply chain disruption or unusual demand, including:
- freezers,
- $100 bills (on one bank in New York City),
- jigsaw puzzles,
- Kettlebells,
- blood,
- baking yeast,
- dogs and cats for adoption in New York City,
- PlayStation 4,
- Nintendo Switch and Nintendo Switch Lite,
- laptop and tablet computers,
- and small gold bars and gold coins.
Condoms:
In late March and early April, concerns about a global condom shortage arose after some factories that manufacture condoms were forced to shut down or reduce their operations, in compliance with government-imposed stay-at-home orders, including Malaysia-based Karex, the world's largest condom producer. This has been compounded with delays in delivery due to greater restrictions on imports and freight, such as Egypt's 18-day quarantine on condom shipments.
The possibility of a condom shortage has been particularly concerning for groups focused on contraception and HIV prevention in Africa.
Toilet paper and other paper products:
The pandemic led to shortages of toilet paper in various countries, including Australia, Singapore, Hong Kong, Canada, the United Kingdom and the United States. In March 2020 at numerous stores throughout these countries, shoppers reported empty shelves in both the toilet paper section as well as sections for related products such as paper towels, tissues, and diapers.
Initially, much of this was blamed on panic buying. Consumers began fearing both supply chain disruption and the possibility of being forced into extended quarantines that would prevent them from purchasing toilet paper and related products, despite reassurance from industry and government that neither was likely to occur. As a result, some consumers began hoarding toilet paper, leading to reports of empty shelves, which in turn led to additional fear of a toilet paper shortage that prompted others to hoard toilet paper as well.
The shortage created a massive spike in Google Search, over 4000% for the term "toilet paper" alone. Essential supply locator sites and tools sprouted up everywhere in an effort to assist communities in finding local sources as online retailers were out of stock.
However, by early April 2020, additional factors other than panic buying were identified as causes of the toilet paper shortage. In particular, as a result of stay-at-home orders, people have been spending much less time at schools, workplaces, and other public venues and much more time at home, thus using public toilets less frequently and home toilets more frequently.
This has caused a strain on supply chains, since public toilets and home toilets generally use two different grades of toilet paper: commercial toilet paper and consumer toilet paper, respectively. Georgia-Pacific predicted a 40 percent increase in the use of consumer toilet paper as a result of people staying at home.
Due to differences in roll size, packaging, and supply and distribution networks between the two grades, toilet paper manufacturers are expected to have difficulty shifting production to meet the shift in demand from commercial to home use, leading to lingering shortages even after panic buying subsides. There has also been an increase in the sale of bidets.
Others:
In France, due to closed borders preventing foreign seasonal workers from entering the country, the Minister of Agriculture called for jobless volunteers to contact strawberry farms to help collect the harvest for the usual minimal wage,
Laboratory mice are being culled, and some strains are at risk of shortage due to lockdowns.
In the United States, social distancing has led to shortages of blood donations.
Coins:
A shortage of coins was also reported around the United States as the circulation of coins came to a halt. The normal circulation of coins through banks, business, and consumers was interrupted at every step.
The lockdown closed both banks and businesses. Consumers also shied away from the use of cash when health warnings from the WHO, NIH, and CDC indicated that the use of cash and coin could spread the virus. Therefore, coins stopped moving throughout the economy.
The shortage was further exacerbated when the United States Department of the Treasury authorized the minting of fewer coins earlier in the year to protect workers during the pandemic.
See also:
- List of countries by hospital beds – Wikipedia list article
- Economic impact of the COVID-19 pandemic – Economic effects of the COVID-19 pandemic
American Rescue Plan Act of 2021
- YouTube Video: Examining the American Rescue Plan Act: Key Provisions for Organizations & Individuals
- YouTube Video: Markup of: American Rescue Plan Act of 2021
- YouTube Video: Nonpartisan report shows who is likely to benefit most from American Rescue Plan
The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021, to speed up the United States' recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession.
First proposed on January 14, 2021, the package builds upon many of the measures in the CARES Act from March 2020 and in the Consolidated Appropriations Act, 2021, from December.
Beginning on February 2, 2021, Democrats in the United States Senate started to open debates on a budget resolution that would allow them to pass the stimulus package without support from Republicans through the process of reconciliation.
The House of Representatives voted 218–212 to approve its version of the budget resolution. A vote-a-rama session started two days later after the resolution was approved, and the Senate introduced amendments in the relief package. The day after, Vice President Kamala Harris cast her first tie-breaking vote as vice president in order to give the Senate's approval to start the reconciliation process, with the House following suit by voting 219–209 to agree to the Senate version of the resolution.
On February 8, 2021, the Financial Services and Education and Labor committees released a draft of $1.9 trillion stimulus legislation. A portion of the relief package was approved by the House Ways and Means on February 11, setting it up for a vote in the House. The legislation was also approved by the Transportation and Infrastructure, Small Business, and House Veterans Affairs committees.
On February 22, the House Budget Committee voted 19–16 to advance the bill to the House for a floor vote. The bill passed the House by a vote of 219–212 on February 27. All but two Democrats voted for the bill and all Republicans voted against the bill. A modified version passed the Senate on March 6 by a vote of 50–49.
The final amended bill was passed by the House on March 10 by a vote of 220–211 with one Democrat voting against it with all Republicans. The bill was signed into law by President Biden on March 11, 2021, which was the first anniversary of COVID-19 being declared a global pandemic by the World Health Organization.
Background:
Impact of the COVID-19 pandemic:
Further information:
The United States went under an economic recession, and roughly 500,000 Americans died due to the public health crisis. Additionally, over 29 million Americans tested positive for COVID-19 since the start of the pandemic.
The United States also faced an eviction, unemployment, and hunger crisis since the start of the pandemic. Over 30 to 40 million Americans faced a risk of being evicted from their homes by January 2021.
Then-president Donald Trump also faced criticism for not having a federal strategy to combat the pandemic such as nationwide mask mandates on transportation, a testing strategy, health guidelines, providing medical-grade protective gear, and having an effective vaccine distribution strategy. On January 20, the day after Joe Biden was inaugurated, he warned that the death toll could exceed 500,000.
However, according to Snopes, Biden inherited a vaccine distribution strategy from Trump, and disease expert Anthony Fauci said that his administration would incorporate some aspects of that Trump-era strategy in its ongoing work.
Previous COVID-19 pandemic legislation:
Further information:
Prior to the American Rescue Plan, the CARES Act from March and in the Consolidated Appropriations Act, 2021, from December were both signed into law by then-president Donald Trump. Trump previously expressed support for a direct payments of $2,000 along with Joe Biden and the Democrats. Even though Trump called for Congress to pass a bill increasing the direct payments from $600 to $2,000, then-Senate Majority Leader Mitch McConnell blocked the bill.
Additionally, the House voted on the HEROES Act on May 15, 2020, which would operate as a $3 billion relief package, but it wasn't considered by the Senate as Republicans said that it would be "dead on arrival". Prior to the Georgia Senate runoffs, Biden said that the direct payments of $2,000 would be passed if Jon Ossoff and Raphael Warnock won their seats, but also warned that it would not pass if either Kelly Loeffler or David Perdue won.
On January 14, prior to being inaugurated as president, Biden announced the $1.9 trillion stimulus package.
Legislative history:
Negotiations:
Ten Republican senators announced plans to unveil a roughly $600 billion COVID-19 relief package as a counterproposal to President Joe Biden's $1.9 trillion plan meant to force negotiations. The senators, including Susan Collins of Maine, Lisa Murkowski of Alaska, Mitt Romney of Utah and Rob Portman of Ohio, told Biden in a letter that they devised the plan "in the spirit of bipartisanship and unity" that the President has urged and said they planned to release a full proposal on February 1.
On the same day, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer introduced a budget resolution co-sponsored by Bernie Sanders as a step to pass the legislation without support from the Republican Party. The next day, Biden met with Majority Leader Schumer and other Democrats regarding the relief package.
On February 7, Transportation Secretary Pete Buttigieg and Treasury Secretary Janet Yellen expressed support for the stimulus package. Yellen said that the funding would help millions of Americans and rejected concerns the colossal spending could cause inflation. Yellen also said that the stimulus package would restore full employment by 2022.
On February 9, Biden met with JPMorgan Chase CEO Jamie Dimon and other CEOs to discuss the stimulus plan, with Yellen and Harris taking part in the meeting.
On February 11, Pelosi said that she expects lawmakers to complete the legislation by the end of February, and for the legislation to be signed into law by March 14.
On February 16, Biden promoted his stimulus plan in a visit in Milwaukee, Wisconsin during his first official trip as President. He promoted it via a CNN townhall meeting with voters. On February 18, Yellen called for major stimulus checks during an interview on CNBC, and said that stimulus checks would help the economy stage a full recovery.
Budget resolution passage:
The United States Senate voted 50–49 to open debate on the resolution, which would allow Democrats to pass the relief package without support from Republicans through the process of reconciliation. The House voted 218–212 to approve the budget resolution.
On February 4, a vote-a-rama session began, and the Senate introduced amendments to the relief package, including an amendment in a 90–10 vote that would provide direct relief to the restaurant industry.
Vice President Kamala Harris cast her first tie-breaking vote as vice president to give final Senate approval to the reconciliation bill, sending it to the House to approve the changes, and allowing drafting of the relief bill to begin in the committees. The House approved the resolution 219–209, with Jared Golden being the sole Democrat to join all Republicans in opposition to the bill due to a preference for a separate vaccine bill instead of the longer reconciliation process.
One of the many non-binding budget amendments in the vote-a-rama session was meant to prohibit people who are in the country illegally from receiving pandemic relief checks. The non-binding amendments are not likely to have any effect on the final relief bill. The minority party uses the hundreds of non-binding votes in the hours-long vote-a-rama session to send messages.
Under current law, people in the country unlawfully are already prohibited from receiving checks. The amendment passed with eight Democrats joining all Republicans. The amendment received criticism from progressive immigration activist Greisa Martínez Rosas and Senator Mazie Hirono (D-HI).
The White House later stated that it would continue to support legislation that would give all otherwise eligible individuals with social security numbers stimulus checks.
Budget reconciliation passage:
On February 8, a draft of the $1.9 trillion stimulus legislation was released by the Financial Services and Education and Labor committees. On February 11, the House Ways and Means Committee advanced a portion of the $1.9 trillion relief package. The legislation was also approved by several other House committees such as the Transportation and Infrastructure, Small Business, and House Veterans Affairs.
On February 19, the full text of the bill was released. It included an increase in the federal minimum wage, direct checks for Americans making $75,000 or less a year, an extension of $400 federal unemployment benefits and more money for small businesses.
On February 22, the House Budget Committee voted 19–16 to advance the bill. The following day, House Majority Leader Steny Hoyer announced that the House vote would occur that Friday. On February 26, the House passed the trillion dollar relief package by a vote of 219–212; two Democrats, Kurt Schrader (OR) and Jared Golden (ME) joined all Republicans in opposition.
Majority Leader Chuck Schumer predicted that the Senate would pass the bill before March 14. On March 4, Majority Leader Chuck Schumer introduced the Senate version of the bill on the floor, which had a few changes to the House bill. The Senate voted 51-50 to advance the relief bill and allow debates to begin, with Harris casting the tie-breaking vote.
Ron Johnson objected to Schumer's request to skip the reading of the bill, forcing the Senate clerks to read aloud the entire 628-page Senate bill, delaying the Senate amendment process for up to 15 hours. On March 5, the Senate reconvened and had 3 hours of debate, and thereafter moved to the "vote-a-rama" session, where senators would have the opportunity to introduce, debate, and vote on amendments.
There were multiple amendments brought onto the Senate floor. Bernie Sanders introduced the first amendment to raise the federal minimum wage to $15 per hour. All Republicans and eight Democrats voted against the amendment. After the vote, Sanders stated he was not surprised by the outcome and vowed that progressives would keep fighting on other fronts to raise the minimum wage.
Senator Tom Carper introduced an amendment which would extend the unemployment benefits through the end of September but would cut the benefits from $400 to $300. The amendment also did not tax the first $10,200 of unemployment benefits. Senator Joe Manchin, a key vote in the Senate, disagreed with Carper's amendment, stalling the Senate amendment process for hours while his Democratic colleagues and the White House pressured him to support Carper's amendment.
Manchin had initially signaled he would support a GOP-backed amendment by Portman to cut off the unemployment benefits at July. After hours of negotiations between top Senate Democrats and the White House, Manchin stated he would back a revised version of Carper's amendment which would cut off the unemployment benefits at September 6.
Minimum wage provision:
See also: Minimum wage in the United States
President Biden expressed doubt that his push to increase the federal minimum wage to $15 an hour would be included in the final coronavirus relief package. Biden predicted that Senate rules for budget reconciliation would prevent the increase from going forward.
Sanders and his allies argued that the higher wage would reduce the amount of federal assistance low-income individuals receive and increase their taxable income — meeting the Senate parliamentarian's requirement that any reconciliation measure have an effect on the federal budget.
While recent polling indicates that support for increasing the minimum wage to $15 an hour ranges from 53–60%, Democratic Senators Joe Manchin and Kyrsten Sinema opposed this provision and threatened to derail the bill over this issue.
On February 25, the day before the full House vote, the Senate Parliamentarian Elizabeth MacDonough ruled that the proposal to add the minimum wage provision to the stimulus bill was not compatible with the Senate's budget reconciliation process. Pelosi stated later that day that the House will still approve the bill with the minimum wage raise, although it will have to be amended out in the final Senate bill to comply with the parliamentarian's ruling.
Progressive Democrats and liberal groups urged Harris to overrule MacDonough (which she has the constitutional power to do as president of the Senate) or for Senate Democratic leadership to replace her (which the Republicans did once before, firing Robert Dove in 2001 after he made a series of rulings blocking tax cuts from being considered under the 51-vote budget reconciliation process); however, neither course was taken. On March 5, eight members of the Senate Democratic caucus joined all 50 Republican Senators to reject an amendment raised by Senator Sanders to increase the minimum wage to $15 in the bill.
In a budget analysis released in February 2021, the Congressional Budget Office found that increasing the minimum wage to $15 would lift 900,000 people out of poverty and cumulatively raise the wage of all affected people by $333 billion, but also could increase the cumulative budget deficit, over the next decade, to $54 billion (and add $16 billion in interest costs) and reduce employment by 0.9% (1.4 million jobs) over four years.
Republican Senators Mitt Romney and Tom Cotton introduced their own bill, which would raise the minimum wage to $10, phasing in gradually to 2025. The minimum wage would biennially rise with inflation, indexed to the chained consumer price index.
Businesses would also be required to use the E-Verify system so to ensure that workers paid the higher wages are legal immigrants and eligible to work. Adult workers would have to provide a photo ID, states would be incentivized to share driver’s-license data with the system, and the federal government would make more of an effort to block or suspend misused Social Security numbers.
Other provisions not included in the final bill:
The House-passed bill included $1.5 million for the Seaway International Bridge, which connects the U.S. and Canada, and $140 million for the Silicon Valley BART extension; however, both provisions were removed from the Senate bill due to Republican opposition.
Final passage:
On March 10, 2021, the House passed the Senate bill on a party-line vote of 220–211 (concurring in the Senate amendments), sending the bill to President Biden for his signature. Biden signed the bill the following day, on March 11, 2021. On March 15, 2021, the White House announced that Gene Sperling will oversee the implementation of the bill.
Following the signing, Biden and his top messengers kicked off a "Help is Here" tour across the country to promote the legislation, with Harris visiting a COVID-19 vaccination site in Las Vegas and First Lady Jill Biden visiting an elementary school in New Jersey. On March 16, Biden promoted the bill in Chester, Pennsylvania.
Key elements of the Act:
Key elements of the Act include:
Impact:
The bill's economic-relief provisions are overwhelmingly geared toward low-income and middle-class Americans, who will benefit from (among other provisions) the direct payments, the bill's expansion of low-income tax credits, child-care subsidies, expanded health-insurance access, extension of expanded unemployment benefits, food stamps, and rental assistance programs.
The bill contains little direct aid to high income-earners, who largely retained their jobs during the COVID-19 economic shock and bolstered their savings. Biden's administration crafted the plan in part because economic aid to lower-income and middle-income Americans (who are more likely to immediately spend funds on bills, groceries, and housing costs to avoid eviction or foreclosure) is more likely to stimulate the U.S. economy than aid to higher-earners (who are more likely to save the money).
The Institute on Taxation and Economic Policy found that the stimulus bill's direct payments, child tax credit expansion, and earned income tax credit expansion would boost the income of the poorest one-fifth of Americans by nearly $3,590. The Congressional Budget Office estimated that the bill's increase in health insurance subsidies would lead to 1.3 million previously uninsured Americans gaining health insurance coverage.
An analysis by Columbia University's Center on Poverty and Social Policy estimated that the original stimulus proposal would reduce overall U.S. poverty by a third, reduce child poverty by 57.8% and reduce the adult poverty rate by more than 25%. However these estimates relied in part upon a minimum wage increase that was not included in the final bill, meaning effects on poverty may be notably different then anticipated in that study.
The Tax Policy Center wrote that, for households making under $25,000, the bill would cut their taxes by an average of $2,800, which would boost their after-tax income by 20%.
Additionally, low-income households with children would see an average tax cut of about $7,700, and this would boost their after-tax income by 35%. Middle-income households will also see an average tax cut of about $3,350, and this would increase their after-tax income by 5.5%. Overall, about 70% of the bill's tax benefits will go to households making under $91,000.
Reactions:
Congress:
In a deeply polarized Congress, the relief package received universal support from Democrats and universal opposition from Republicans, passing on party-line votes.
Some House Democratic progressives expressed disappointment with some changes to the relief package made in the Senate (such as the dropping of the $15 minimum wage) to win over moderate Democratic support, but continued to support the package.
Republicans in Congress opposed the bill, but failed to unify around a specific critique other than calling it "ultraprogressive" or "bloated," and falsely claiming the bill only benefitted Democratic-led states.
While debates and negotiations over the stimulus package were on-going, Republicans focused instead on culture war issues unrelated to government actions, such as the decision by the Dr. Seuss estate to stop publishing a racially incendiary Dr. Seuss book and the re-branding of the "Mr. Potato Head" toy.
Many of the provisions in the bill were also included in stimulus legislation passed with Republican support under the Trump administration, making it difficult for Republicans to argue against them. After Congress passed the bill, Senator Roger Wicker (R-MS) highlighted on social media that the bill awarded $28.6 billion of "targeted relief" for "independent restaurant operators" to "survive the pandemic".
In that social media post, Wicker neglected to mention that he had in fact voted against the bill.
President Biden:
President Joe Biden advocated for fast-tracking the stimulus package with optimally bipartisan support. In early February 2021, Biden criticized Republicans for not seeking a bipartisan compromise on a final aid bill, and said the Republicans were wilfully obstructing his proposal.
At the time, Biden signaled openness to passing the legislation without any support from congressional Republicans. Biden stated that he could not, "in good conscience," make concessions to Republicans who he said propose to either "do nothing or not enough" as Republicans complain Biden is forsaking his promises on bipartisanship and unity.
Furthermore, Biden noted that "[a]ll of a sudden, many of them have rediscovered fiscal restraint and the concern for the deficits" whereas in the Trump administration Republicans had passed trillions in dollars in tax cuts and mostly corporate aid for the coronavirus crisis, adding trillions of dollars to the national debt without much reservation.
Others:
Republican mayors such as Jerry Dyer of Fresno, Francis X. Suarez of Miami, David Holt of Oklahoma City, and Betsy Price of Fort Worth, Texas expressed their support for the plan. Dyer told the Washington Post that "It’s not a Republican issue or a Democrat issue. It’s a public health issue. It’s an economic issue. And it’s a public safety issue."
Over 150 CEOs of major companies expressed support for the Biden stimulus plan in a letter and urged Congress to pass it.
A broad range of advocacy and interest groups praised the bill, including:
The Business Roundtable, U.S. Chamber of Commerce, and Committee for a Responsible Federal Budget called for a smaller and more targeted package.
Several observers have noted that the stimulus greatly increases the role of the government in fighting poverty in the United States, to an extent not seen since Lyndon Johnson's Great Society in the 1960s; accordingly some have seen it as evidence that the United States is moving towards social democracy and away from the "government is the problem" consensus in place since the 1980s.
Public opinion:
The stimulus plan had broad public support. A February 11 Newsweek/Harris X poll showed that 60% of Republican voters expressed support for the stimulus plan and a poll from Quinnipiac University found that 68% of Americans support it.
A Morning Consult/Politico poll showed that 76% of voters, including 60% of Republicans and 89% of Democrats, supported the bill.
A Monmouth University poll found that 62% of Americans approve of the stimulus package, with 92% of Democrats, 56% of independents, and 33% of Republicans supporting the legislation.
CBS News released a poll on March 12, which showed that 75% of Americans approved the stimulus bill, including 77% of independents, 46% of Republicans, and 94% of Democrats.
See also:
First proposed on January 14, 2021, the package builds upon many of the measures in the CARES Act from March 2020 and in the Consolidated Appropriations Act, 2021, from December.
Beginning on February 2, 2021, Democrats in the United States Senate started to open debates on a budget resolution that would allow them to pass the stimulus package without support from Republicans through the process of reconciliation.
The House of Representatives voted 218–212 to approve its version of the budget resolution. A vote-a-rama session started two days later after the resolution was approved, and the Senate introduced amendments in the relief package. The day after, Vice President Kamala Harris cast her first tie-breaking vote as vice president in order to give the Senate's approval to start the reconciliation process, with the House following suit by voting 219–209 to agree to the Senate version of the resolution.
On February 8, 2021, the Financial Services and Education and Labor committees released a draft of $1.9 trillion stimulus legislation. A portion of the relief package was approved by the House Ways and Means on February 11, setting it up for a vote in the House. The legislation was also approved by the Transportation and Infrastructure, Small Business, and House Veterans Affairs committees.
On February 22, the House Budget Committee voted 19–16 to advance the bill to the House for a floor vote. The bill passed the House by a vote of 219–212 on February 27. All but two Democrats voted for the bill and all Republicans voted against the bill. A modified version passed the Senate on March 6 by a vote of 50–49.
The final amended bill was passed by the House on March 10 by a vote of 220–211 with one Democrat voting against it with all Republicans. The bill was signed into law by President Biden on March 11, 2021, which was the first anniversary of COVID-19 being declared a global pandemic by the World Health Organization.
Background:
Impact of the COVID-19 pandemic:
Further information:
- Economic impact of the COVID-19 pandemic in the United States
- and COVID-19 pandemic in the United States.
The United States went under an economic recession, and roughly 500,000 Americans died due to the public health crisis. Additionally, over 29 million Americans tested positive for COVID-19 since the start of the pandemic.
The United States also faced an eviction, unemployment, and hunger crisis since the start of the pandemic. Over 30 to 40 million Americans faced a risk of being evicted from their homes by January 2021.
Then-president Donald Trump also faced criticism for not having a federal strategy to combat the pandemic such as nationwide mask mandates on transportation, a testing strategy, health guidelines, providing medical-grade protective gear, and having an effective vaccine distribution strategy. On January 20, the day after Joe Biden was inaugurated, he warned that the death toll could exceed 500,000.
However, according to Snopes, Biden inherited a vaccine distribution strategy from Trump, and disease expert Anthony Fauci said that his administration would incorporate some aspects of that Trump-era strategy in its ongoing work.
Previous COVID-19 pandemic legislation:
Further information:
Prior to the American Rescue Plan, the CARES Act from March and in the Consolidated Appropriations Act, 2021, from December were both signed into law by then-president Donald Trump. Trump previously expressed support for a direct payments of $2,000 along with Joe Biden and the Democrats. Even though Trump called for Congress to pass a bill increasing the direct payments from $600 to $2,000, then-Senate Majority Leader Mitch McConnell blocked the bill.
Additionally, the House voted on the HEROES Act on May 15, 2020, which would operate as a $3 billion relief package, but it wasn't considered by the Senate as Republicans said that it would be "dead on arrival". Prior to the Georgia Senate runoffs, Biden said that the direct payments of $2,000 would be passed if Jon Ossoff and Raphael Warnock won their seats, but also warned that it would not pass if either Kelly Loeffler or David Perdue won.
On January 14, prior to being inaugurated as president, Biden announced the $1.9 trillion stimulus package.
Legislative history:
Negotiations:
Ten Republican senators announced plans to unveil a roughly $600 billion COVID-19 relief package as a counterproposal to President Joe Biden's $1.9 trillion plan meant to force negotiations. The senators, including Susan Collins of Maine, Lisa Murkowski of Alaska, Mitt Romney of Utah and Rob Portman of Ohio, told Biden in a letter that they devised the plan "in the spirit of bipartisanship and unity" that the President has urged and said they planned to release a full proposal on February 1.
On the same day, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer introduced a budget resolution co-sponsored by Bernie Sanders as a step to pass the legislation without support from the Republican Party. The next day, Biden met with Majority Leader Schumer and other Democrats regarding the relief package.
On February 7, Transportation Secretary Pete Buttigieg and Treasury Secretary Janet Yellen expressed support for the stimulus package. Yellen said that the funding would help millions of Americans and rejected concerns the colossal spending could cause inflation. Yellen also said that the stimulus package would restore full employment by 2022.
On February 9, Biden met with JPMorgan Chase CEO Jamie Dimon and other CEOs to discuss the stimulus plan, with Yellen and Harris taking part in the meeting.
On February 11, Pelosi said that she expects lawmakers to complete the legislation by the end of February, and for the legislation to be signed into law by March 14.
On February 16, Biden promoted his stimulus plan in a visit in Milwaukee, Wisconsin during his first official trip as President. He promoted it via a CNN townhall meeting with voters. On February 18, Yellen called for major stimulus checks during an interview on CNBC, and said that stimulus checks would help the economy stage a full recovery.
Budget resolution passage:
The United States Senate voted 50–49 to open debate on the resolution, which would allow Democrats to pass the relief package without support from Republicans through the process of reconciliation. The House voted 218–212 to approve the budget resolution.
On February 4, a vote-a-rama session began, and the Senate introduced amendments to the relief package, including an amendment in a 90–10 vote that would provide direct relief to the restaurant industry.
Vice President Kamala Harris cast her first tie-breaking vote as vice president to give final Senate approval to the reconciliation bill, sending it to the House to approve the changes, and allowing drafting of the relief bill to begin in the committees. The House approved the resolution 219–209, with Jared Golden being the sole Democrat to join all Republicans in opposition to the bill due to a preference for a separate vaccine bill instead of the longer reconciliation process.
One of the many non-binding budget amendments in the vote-a-rama session was meant to prohibit people who are in the country illegally from receiving pandemic relief checks. The non-binding amendments are not likely to have any effect on the final relief bill. The minority party uses the hundreds of non-binding votes in the hours-long vote-a-rama session to send messages.
Under current law, people in the country unlawfully are already prohibited from receiving checks. The amendment passed with eight Democrats joining all Republicans. The amendment received criticism from progressive immigration activist Greisa Martínez Rosas and Senator Mazie Hirono (D-HI).
The White House later stated that it would continue to support legislation that would give all otherwise eligible individuals with social security numbers stimulus checks.
Budget reconciliation passage:
On February 8, a draft of the $1.9 trillion stimulus legislation was released by the Financial Services and Education and Labor committees. On February 11, the House Ways and Means Committee advanced a portion of the $1.9 trillion relief package. The legislation was also approved by several other House committees such as the Transportation and Infrastructure, Small Business, and House Veterans Affairs.
On February 19, the full text of the bill was released. It included an increase in the federal minimum wage, direct checks for Americans making $75,000 or less a year, an extension of $400 federal unemployment benefits and more money for small businesses.
On February 22, the House Budget Committee voted 19–16 to advance the bill. The following day, House Majority Leader Steny Hoyer announced that the House vote would occur that Friday. On February 26, the House passed the trillion dollar relief package by a vote of 219–212; two Democrats, Kurt Schrader (OR) and Jared Golden (ME) joined all Republicans in opposition.
Majority Leader Chuck Schumer predicted that the Senate would pass the bill before March 14. On March 4, Majority Leader Chuck Schumer introduced the Senate version of the bill on the floor, which had a few changes to the House bill. The Senate voted 51-50 to advance the relief bill and allow debates to begin, with Harris casting the tie-breaking vote.
Ron Johnson objected to Schumer's request to skip the reading of the bill, forcing the Senate clerks to read aloud the entire 628-page Senate bill, delaying the Senate amendment process for up to 15 hours. On March 5, the Senate reconvened and had 3 hours of debate, and thereafter moved to the "vote-a-rama" session, where senators would have the opportunity to introduce, debate, and vote on amendments.
There were multiple amendments brought onto the Senate floor. Bernie Sanders introduced the first amendment to raise the federal minimum wage to $15 per hour. All Republicans and eight Democrats voted against the amendment. After the vote, Sanders stated he was not surprised by the outcome and vowed that progressives would keep fighting on other fronts to raise the minimum wage.
Senator Tom Carper introduced an amendment which would extend the unemployment benefits through the end of September but would cut the benefits from $400 to $300. The amendment also did not tax the first $10,200 of unemployment benefits. Senator Joe Manchin, a key vote in the Senate, disagreed with Carper's amendment, stalling the Senate amendment process for hours while his Democratic colleagues and the White House pressured him to support Carper's amendment.
Manchin had initially signaled he would support a GOP-backed amendment by Portman to cut off the unemployment benefits at July. After hours of negotiations between top Senate Democrats and the White House, Manchin stated he would back a revised version of Carper's amendment which would cut off the unemployment benefits at September 6.
Minimum wage provision:
See also: Minimum wage in the United States
President Biden expressed doubt that his push to increase the federal minimum wage to $15 an hour would be included in the final coronavirus relief package. Biden predicted that Senate rules for budget reconciliation would prevent the increase from going forward.
Sanders and his allies argued that the higher wage would reduce the amount of federal assistance low-income individuals receive and increase their taxable income — meeting the Senate parliamentarian's requirement that any reconciliation measure have an effect on the federal budget.
While recent polling indicates that support for increasing the minimum wage to $15 an hour ranges from 53–60%, Democratic Senators Joe Manchin and Kyrsten Sinema opposed this provision and threatened to derail the bill over this issue.
On February 25, the day before the full House vote, the Senate Parliamentarian Elizabeth MacDonough ruled that the proposal to add the minimum wage provision to the stimulus bill was not compatible with the Senate's budget reconciliation process. Pelosi stated later that day that the House will still approve the bill with the minimum wage raise, although it will have to be amended out in the final Senate bill to comply with the parliamentarian's ruling.
Progressive Democrats and liberal groups urged Harris to overrule MacDonough (which she has the constitutional power to do as president of the Senate) or for Senate Democratic leadership to replace her (which the Republicans did once before, firing Robert Dove in 2001 after he made a series of rulings blocking tax cuts from being considered under the 51-vote budget reconciliation process); however, neither course was taken. On March 5, eight members of the Senate Democratic caucus joined all 50 Republican Senators to reject an amendment raised by Senator Sanders to increase the minimum wage to $15 in the bill.
In a budget analysis released in February 2021, the Congressional Budget Office found that increasing the minimum wage to $15 would lift 900,000 people out of poverty and cumulatively raise the wage of all affected people by $333 billion, but also could increase the cumulative budget deficit, over the next decade, to $54 billion (and add $16 billion in interest costs) and reduce employment by 0.9% (1.4 million jobs) over four years.
Republican Senators Mitt Romney and Tom Cotton introduced their own bill, which would raise the minimum wage to $10, phasing in gradually to 2025. The minimum wage would biennially rise with inflation, indexed to the chained consumer price index.
Businesses would also be required to use the E-Verify system so to ensure that workers paid the higher wages are legal immigrants and eligible to work. Adult workers would have to provide a photo ID, states would be incentivized to share driver’s-license data with the system, and the federal government would make more of an effort to block or suspend misused Social Security numbers.
Other provisions not included in the final bill:
The House-passed bill included $1.5 million for the Seaway International Bridge, which connects the U.S. and Canada, and $140 million for the Silicon Valley BART extension; however, both provisions were removed from the Senate bill due to Republican opposition.
Final passage:
On March 10, 2021, the House passed the Senate bill on a party-line vote of 220–211 (concurring in the Senate amendments), sending the bill to President Biden for his signature. Biden signed the bill the following day, on March 11, 2021. On March 15, 2021, the White House announced that Gene Sperling will oversee the implementation of the bill.
Following the signing, Biden and his top messengers kicked off a "Help is Here" tour across the country to promote the legislation, with Harris visiting a COVID-19 vaccination site in Las Vegas and First Lady Jill Biden visiting an elementary school in New Jersey. On March 16, Biden promoted the bill in Chester, Pennsylvania.
Key elements of the Act:
Key elements of the Act include:
- Extending expanded unemployment benefits with a $300 weekly supplement through Labor Day (September 6, 2021), preventing benefits from expiring on March 31, 2021
- Most Democrats favored a higher amount (with the bill initially passed by the House providing for $400 weekly supplement) and some favored a longer duration (through early October); however, the final bill contained a scaled-back provision, at the insistence of Senator Joe Manchin of West Virginia, and other moderate Senate Democrats.
- The act makes the first $10,200 in unemployment benefits for 2020 not taxable for households with incomes below $150,000, thus avoiding the risk of many workers incurring surprise federal tax liability.
- $1,400 direct payments to individuals.
- Under pressure from Manchin, Biden agreed to have the direct payment start to phase out for high-income taxpayers, including some who received stimulus checks in previous stimulus rounds. The stimulus benefit begins to phase out for taxpayers making $75,000 for individuals, $112,500 for single parents, and $150,000 for couples; taxpayers making more than $80,000 for individuals, $120,000 for single parents, and $160,000 for households will not receive any payment. (House Democrats and Biden had favored less stringent caps; the bill initially passed by the House set income caps $100,000 for individuals and $200,000 for couples).
- Unlike in past rounds of stimulus payments, otherwise eligible adult dependents will receive payments, including college students, SSI recipients, and SSDI recipients.
- Emergency paid leave for over 100 million Americans
- The Act provides a tax credit, through October 1, 2021, to employers who choose to offer paid sick leave and paid family leave benefits. However, the Act did not require employers to provide the benefit, as Biden initially proposed.
- Extends a 15% increase in food stamp benefits (the increase, passed in previous rounds of stimulus; was set to expire at the end of June 2021; the bill extends it through September 2021).
- Tax provisions
- Expands the child tax credit by allowing qualifying families to offset, for the 2021 tax year, $3,000 per child up to age 17 and $3,600 per child under age 6. The size of the benefit will gradually diminish for single filers earning more than $75,000 per year, or married couples making more than $150,000 a year. Additionally, this credit is now fully refundable, and half of the benefit can be sent out to eligible households in 2021. The proposal was backed by Senator Mitt Romney of Utah, who introduced a similar bill four days earlier.
- Expands the child and dependent care credit by making the credit fully refundable and increasing the maximum benefit to $4,000 for one eligible individual and $8,000 for two or more eligible individuals. Additionally, the value of this credit will now be based on 50% of the value of eligible expenses. The income limit for receiving this credit is also increased to $125,000 for households. These changes are also for 2021 only.
- Expands the earned income tax credit by removing the upper age limit and lowering the lower age limit to 19. The maximum benefit for adults not claiming a qualifying child will also be increased to $1,502. These provisions are for 2021 only. A permanent change was made to raise the limit on investment income from $3,650 to $10,000, indexed by inflation; and to allow adults with children who do not qualify to claim the credit to claim it only for themselves.
- Forgiven student loan debt is made tax-free, should Biden or Congress decide to cancel any debt.
- Reduction of reporting requirement threshold (1099-K) for third party settlement organizations (e.g. PayPal) from over $20,000 and 200 transactions to over $600 and no minimum number of transaction. This is expected to impact gig workers, independent contractors, casual eBay sellers, among others. This amendment is projected to generate $8.4 billion over the next decade.
- Three tax increases on large corporations and wealthy individuals, collectively raising $60 billion in revenue. These are:
- Limits publicly traded companies' ability to deduct executive compensation (for employees more than $1 million) from their corporate taxes (will generate $6 billion in tax revenue).
- Repeals an obscure provisions in the tax code that gave multinational corporations additional discretion in accounting for interest expenses (will generate $22 billion in tax revenue).
- Extends "loss limitation" restrictions on unincorporated businesses (will generate $31 billion in tax revenue)
- Grants to small businesses, specifically:
- $28.6 billion for a new grant program for restaurants and bars to meet payroll and other expenses. Individual businesses will be eligible for $5 million each.
- $15 billion for Emergency Injury Disaster Loans (a long-term, low-interest loan program of the Small Business Administration); priority for some funds would go to "severely impacted small businesses with fewer than 10 workers".
- An additional $7 billion for the Paycheck Protection Program, and an expansion of the eligibility criteria to some non-profit organizations previously excluded from the program.
- $3 billion for a payroll support program for aviation manufacturers. The industry itself will be responsible for funding half of the program, and the program will last six months.
- $1.25 billion in funding for the Shuttered Venue Operators Grant for music halls and other concert venues
- $175 million for a Community Navigator Program to reach out to eligible businesses.
- $350 billion to help state, local, and tribal governments bridge budget shortfalls and mitigate the fiscal shock.
- A total of $195 billion would be allocated among the states and the District of Columbia, and the tribes and territories would be allocated about $25 billion.
- The Act also allocates $60 billion to counties and $10 billion for a Coronavirus Capital Projects Fund. (The bill initially passed by the House would have instead allocated $65 billion to counties and $65 billion to municipalities, but the Senate formula was adopted instead).
- Education funding:
- $130 billion for K-12 schools, to safely reopen most schools within 100 days.
- The money for K-12 schools may be used to improve ventilation in school buildings, reduce class sizes to make social distancing possible, purchase personal protective equipment, and hire support staff.
- 20% of the school money must be directed to programs to help counteract "learning loss" from students who missed school during the pandemic.
- Almost $40 billion for colleges and universities.
- At least half of the money to colleges and universities must go to emergency grants to students.
- $130 billion for K-12 schools, to safely reopen most schools within 100 days.
- Funding for housing:
- $21.6 billion for rental assistance programs. This fund will provide money to states and local governments, which will then provide grants to eligible households. These grants can be used to pay for rental assistance as well as utility fees.
- $10 billion for the Homeowner Assistance Fund. This fund will allocate money to states and local governments, which will then give grants to homeowners to prevent them from defaulting on their mortgage or foreclosing on their home. These grants can also be used to pay for flood insurance premiums, HOA fees, utility bills, and any other necessary payments to prevent the homeowner from losing their home.
- $5 billion for the Section 8 Housing Choice Voucher Program. These funds must go to those who are or were recently homeless, as well as individuals who are escaping from domestic violence, sexual assault, or human trafficking.
- $5 billion to support state and local programs for the homeless and at-risk individuals. These funds can be used for rental assistance, housing counseling, and homelessness prevention services. Additionally, these grants can be used by state and local governments to buy and convert commercial properties into permanent shelters or affordable housing.
- $4.5 billion for the Low-Income Home Energy Assistance Program, which will assist homeowners with the costs of heating and cooling.
- $750 million for housing assistance for tribes and Native Hawaiians. These grants can be used by tribal nations or Native Hawaiians to pay rent or stay housed.
- $500 million in grants for low-income homes to help with water services.
- $139 million for rural housing assistance programs.
- $120 million for housing counseling services.
- The bill contains the following COVID-19 funding (including for COVID-19 vaccines, testing, and contact tracing) and other healthcare-related funding:
- $50 billion to the Federal Emergency Management Agency for vaccine distribution and assistance.
- $47.8 billion on COVID-19 testing, mitigation, and transmission prevention, including diagnosis, tracing, and monitoring.
- $13.48 billion for Department of Veterans Affairs healthcare programs through September 30, 2023.
- $10 billion under the Defense Production Act for personal protective equipment and other medical gear, and for response to pathogens that could become future public health emergencies.
- $7.66 billion for workforce programs for state, local, and territorial public health departments and certain nonprofits, including funds to hire and train the following:
- "case investigators,
- contact tracers,
- social support specialists,
- community health workers,
- public health nurses,
- disease intervention specialists,
- epidemiologists,
- program managers,
- laboratory personnel,
- informaticians,
- communication and policy experts,
- and any other positions as may be required to prevent, prepare for, and respond to COVID-19."
- $7.6 billion to community health centers and Federally Qualified Health Centers to combat COVID-19, including promotion, distribution, and administration of the COVID-19 vaccine; COVID-19 tracing and mitigation; COVID-19-related equipment; and COVID-19 outreach and education.
- $7.5 billion to the Centers for Disease Control and Prevention (CDC) for COVID-19 vaccine distribution, administration, and tracking, including preparation of community vaccination centers and mobile vaccine units and acceleration of vaccine deployment. The bill funds 100,000 public health workers for vaccination outreach and contact tracing.
- $6.05 billion for "expenses related to research, development, manufacturing, production and purchase of vaccines".
- $5.4 billion to the Indian Health Services.
- $3.5 billion in block grants to states, evenly split between the Community Mental Health Services Block Grant program and the Substance Abuse Prevention Treatment Block Grant program.
- $1.75 billion for genomic sequencing, analytics, and disease surveillance.
- $1 billion to the U.S. Department of Health and Human Services for vaccine confidence programs to increase vaccination rates.
- Approximately $750 million on global health security to fight COVID-19 and other emerging infectious diseases.
- $500 million to the Food and Drug Administration to evaluate vaccine performance and facilitate vaccine oversight and manufacturing.
- $330 million for teaching health centers with graduate medical education programs.
- $500 million to the CDC for public health surveillance and analytics, including a modernization of the U.S. disease warning system to predict COVID-19 "hot spots" and emerging public health threats.
- $200 million for nursing loan repayment programs.
- $100 million for the Medical Reserve Corps.
- $100 million for a Behavioral Health Workforce Education and Training Program.
- $80 million for mental and behavioral health training.
- $86 billion for a rescue package/bailout for approximately 185 multiemployer pension funds (usually pension plans set up by a union and industry) that are close to insolvency. The pension funds collectively cover 10.7 million workers.
- Transportation provisions
- $30.5 billion in grants to public transit and commuter rail agencies across the country to mitigate major decreases in ridership and fare revenue due to the COVID-19 pandemic. This includes $6 billion to the MTA (the U.S.'s largest public transit agency) and $1.4 billion to the WMATA, VRE and MARC.)
- $15 billion for airlines and airline contractors for a third extension of Payroll Support Program (which would otherwise have expired at the end of March 2021). The extension will prevent the furlough of more than 27,000 aviation employees.
- $8 billion for U.S. airports.
- $2 billion for Amtrak.
- $10.4 billion for agriculture and USDA, of which:
- $4 billion (39% of total agricultural expenditures) and $1 billion (9.7% of total agricultural expenditures) goes to debt forgiveness and outreach/support, respectively, for socially disadvantaged farmers. Experts identified the relief bill as the most important legislation for African-American farmers since the Civil Rights Act of 1964, benefiting many who were not fully compensated by the Pigford settlements.
- $3.6 billion (35% of total agricultural expenditures) for COVID-19 response (e.g., for agricultural and supply chain workers) and for the purchase and distribution of food.
- $800 million (7.7% of total agricultural expenditures) for Food for Peace.
- $500 million (4.8% of total agricultural expenditures) for USDA-administered Emergency Rural Development Grants for Rural Healthcare.
- $1.85 billion for cybersecurity funding as a response to the SolarWinds hack.
- $1 billion will go to the General Services Administration's Technology Modernization Fund which will help the federal government launch new cyber and information technology programs.
- $650 million will go to the Cybersecurity and Infrastructure Security Agency to improve its risk mitigation services.
- $200 million will go to the U.S. Digital Service.
- Changes to healthcare:
- Subsidizes 100% of premiums for COBRA recipients from April 1 to September 30, 2021. Due to these subsidies, at least 2.2 million additional people will enroll in COBRA in 2021.
- Temporary changes to ACA:
- Removing the welfare cliff by removing the income limit on premium subsidies. Instead, anyone can be eligible for premium subsidies if the cost of their premiums is more than 8.5% of their income. These subsidies will not affect rich households.
- Increasing subsidies that are already available to low-income households. An estimated 2.5 million uninsured people will get covered due to these changes. Additionally, about 3.4 million of the lowest income enrollees will see their premiums fall by 100%.
- Create a special rule whereby anyone who qualifies for unemployment automatically qualifies for the maximum amount of subsidies.
- Protect any ACA subsidy recipient from clawbacks due to income fluctuations in 2020.
- Medicaid and CHIP changes:
- Requires coverage of COVID-19 vaccines and treatment. Expands state options for COVID-19 testing for the uninsured.
- Allows states to give 12 months of post-partum coverage for new mothers.
- Introduce new incentives for states to expand Medicaid coverage.
Impact:
The bill's economic-relief provisions are overwhelmingly geared toward low-income and middle-class Americans, who will benefit from (among other provisions) the direct payments, the bill's expansion of low-income tax credits, child-care subsidies, expanded health-insurance access, extension of expanded unemployment benefits, food stamps, and rental assistance programs.
The bill contains little direct aid to high income-earners, who largely retained their jobs during the COVID-19 economic shock and bolstered their savings. Biden's administration crafted the plan in part because economic aid to lower-income and middle-income Americans (who are more likely to immediately spend funds on bills, groceries, and housing costs to avoid eviction or foreclosure) is more likely to stimulate the U.S. economy than aid to higher-earners (who are more likely to save the money).
The Institute on Taxation and Economic Policy found that the stimulus bill's direct payments, child tax credit expansion, and earned income tax credit expansion would boost the income of the poorest one-fifth of Americans by nearly $3,590. The Congressional Budget Office estimated that the bill's increase in health insurance subsidies would lead to 1.3 million previously uninsured Americans gaining health insurance coverage.
An analysis by Columbia University's Center on Poverty and Social Policy estimated that the original stimulus proposal would reduce overall U.S. poverty by a third, reduce child poverty by 57.8% and reduce the adult poverty rate by more than 25%. However these estimates relied in part upon a minimum wage increase that was not included in the final bill, meaning effects on poverty may be notably different then anticipated in that study.
The Tax Policy Center wrote that, for households making under $25,000, the bill would cut their taxes by an average of $2,800, which would boost their after-tax income by 20%.
Additionally, low-income households with children would see an average tax cut of about $7,700, and this would boost their after-tax income by 35%. Middle-income households will also see an average tax cut of about $3,350, and this would increase their after-tax income by 5.5%. Overall, about 70% of the bill's tax benefits will go to households making under $91,000.
Reactions:
Congress:
In a deeply polarized Congress, the relief package received universal support from Democrats and universal opposition from Republicans, passing on party-line votes.
Some House Democratic progressives expressed disappointment with some changes to the relief package made in the Senate (such as the dropping of the $15 minimum wage) to win over moderate Democratic support, but continued to support the package.
Republicans in Congress opposed the bill, but failed to unify around a specific critique other than calling it "ultraprogressive" or "bloated," and falsely claiming the bill only benefitted Democratic-led states.
While debates and negotiations over the stimulus package were on-going, Republicans focused instead on culture war issues unrelated to government actions, such as the decision by the Dr. Seuss estate to stop publishing a racially incendiary Dr. Seuss book and the re-branding of the "Mr. Potato Head" toy.
Many of the provisions in the bill were also included in stimulus legislation passed with Republican support under the Trump administration, making it difficult for Republicans to argue against them. After Congress passed the bill, Senator Roger Wicker (R-MS) highlighted on social media that the bill awarded $28.6 billion of "targeted relief" for "independent restaurant operators" to "survive the pandemic".
In that social media post, Wicker neglected to mention that he had in fact voted against the bill.
President Biden:
President Joe Biden advocated for fast-tracking the stimulus package with optimally bipartisan support. In early February 2021, Biden criticized Republicans for not seeking a bipartisan compromise on a final aid bill, and said the Republicans were wilfully obstructing his proposal.
At the time, Biden signaled openness to passing the legislation without any support from congressional Republicans. Biden stated that he could not, "in good conscience," make concessions to Republicans who he said propose to either "do nothing or not enough" as Republicans complain Biden is forsaking his promises on bipartisanship and unity.
Furthermore, Biden noted that "[a]ll of a sudden, many of them have rediscovered fiscal restraint and the concern for the deficits" whereas in the Trump administration Republicans had passed trillions in dollars in tax cuts and mostly corporate aid for the coronavirus crisis, adding trillions of dollars to the national debt without much reservation.
Others:
Republican mayors such as Jerry Dyer of Fresno, Francis X. Suarez of Miami, David Holt of Oklahoma City, and Betsy Price of Fort Worth, Texas expressed their support for the plan. Dyer told the Washington Post that "It’s not a Republican issue or a Democrat issue. It’s a public health issue. It’s an economic issue. And it’s a public safety issue."
Over 150 CEOs of major companies expressed support for the Biden stimulus plan in a letter and urged Congress to pass it.
A broad range of advocacy and interest groups praised the bill, including:
- local government groups (National Association of Counties and U.S. Conference of Mayors);
- business associations:
- education organizations:
- organized labor (the AFL-CIO and AFSCME);
- healthcare organizations:
- the American Public Transportation Association,
- the civil rights groups UnidosUS,
- Feeding America,
- the American Hotel & Lodging Association,
- the Main Street Alliance, the U.S. Travel Association,
- the American Hospital Association,
- the Association of American Medical Colleges,
- and the National Council of Nonprofits praised the bill, but said that additional relief would be necessary.
The Business Roundtable, U.S. Chamber of Commerce, and Committee for a Responsible Federal Budget called for a smaller and more targeted package.
Several observers have noted that the stimulus greatly increases the role of the government in fighting poverty in the United States, to an extent not seen since Lyndon Johnson's Great Society in the 1960s; accordingly some have seen it as evidence that the United States is moving towards social democracy and away from the "government is the problem" consensus in place since the 1980s.
Public opinion:
The stimulus plan had broad public support. A February 11 Newsweek/Harris X poll showed that 60% of Republican voters expressed support for the stimulus plan and a poll from Quinnipiac University found that 68% of Americans support it.
A Morning Consult/Politico poll showed that 76% of voters, including 60% of Republicans and 89% of Democrats, supported the bill.
A Monmouth University poll found that 62% of Americans approve of the stimulus package, with 92% of Democrats, 56% of independents, and 33% of Republicans supporting the legislation.
CBS News released a poll on March 12, which showed that 75% of Americans approved the stimulus bill, including 77% of independents, 46% of Republicans, and 94% of Democrats.
See also:
- List of COVID-19 pandemic legislation
- COVID-19 pandemic in the United States
- Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020
- Families First Coronavirus Response Act
- Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – includes $1200 stimulus checks
- Paycheck Protection Program and Health Care Enhancement Act
- Paycheck Protection Program Flexibility Act of 2020
- A bill to extend the authority for commitments for the paycheck protection program
- Consolidated Appropriations Act, 2021 – includes $600 stimulus checks
- Media related to American Rescue Plan at Wikimedia Commons
- US President Biden signs US$1.9 trillion COVID-19 relief package at Wikinews
- Works related to Remarks by President Biden on the American Rescue Plan and Signing of Executive Orders at Wikisource
- Works related to The Economics of the American Rescue Plan at Wikisource
- Works related to American Rescue Plan Fact Sheet at Wikisource