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How is Congress handling the current unemployment in the economy? Is the government’s policy to combat...

How is Congress handling the current unemployment in the economy? Is the government’s policy to combat unemployment acting as an automatic stabilizer?

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Current unemployment is likely to rise further due to COVID-19 pandemic. Thus, the government needs to take the right policy actions to combat the potential rise in the unemployment rate.

During the recession, the automatic stabilizers are working. Unemployment insurances are rising rapidly. Further, the taxes are declining. But these measures are not sufficient to combat the recession.

Thus now the government is in urgent need of the discretionary fiscal policy. Government must raise its expenditure level and reduce the taxes. Currently, government has already announced the stimulus package of over $ 2 trillion which will help to restore the full employments in economy.

Government policy to combat unemployment is not fully acting as an automatic stabilizer. Government is pursuing the disretionary fiscal policy as well.

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