Question

Some economists argue that government should provide cash payments to support low-income
earners, unemployed workers, and other disadvantaged individuals during the current pandemic.
Critically evaluate this approach to support economic recovery.

Answer 1

Money has become an essential commodity in this COVID phase as although there are schemes and programs which are providing the essential necessaries there are certain needs that are unmet for which the unemployed and disadvantaged group require cash. The CARES Act in the US  provide the payments to the families only which have filed the tax return but not everyone comes under this economic income payment scheme hence the government should have another direct cash payment scheme where all families irrespective of tax filing or immigration should be provided with this cash payments. As it is estimated that unemployment is going to be just increasing and with supply shock-induced cash spending is an important path to recovery to stabilize the aggregate demand and circulation of money.