Effect on6/10/2023 ![]() ![]() Payments and tax credits issued to individuals will boost the overall demand for goods and services by providing resources to households, many of which have experienced a significant loss in income. In the short term-that is, from 2020 through 2023-the pandemic-related legislation will affect the economy through several channels. Paycheck Protection Program and Related Provisionsĭirect Assistance for State and Local Governments The Effects of Pandemic-Related Legislation on the Deficit and on GDP, Fiscal Years 2020 to 2023Įffect on the Deficit (Billions of Dollars)Ĭumulative Effect on GDP (Billions of Dollars)Ĭumulative Effect on GDP per Dollar of Effect on the Deficit (Dollars) All of those estimates are subject to considerable uncertainty. In the longer term, the legislation will reduce the level of real GDP, CBO estimates. From fiscal year 2020 through 2023, for every dollar that it adds to the deficit, the legislation is projected to increase GDP by about 58 cents. CBO estimates that the legislation will boost the level of real (inflation-adjusted) gross domestic product (GDP) by 4.7 percent in 2020 and 3.1 percent in 2021. ![]() Those laws, which contained a wide array of conventional and unconventional fiscal policies, will add $2.3 trillion to the deficit in fiscal year 2020 and $0.6 trillion in 2021, according to the Congressional Budget Office’s estimates.īy providing financial support to households, businesses, and state and local governments, the legislation will offset part of the deterioration in economic conditions brought about by the pandemic. ![]() In March and April of 2020, four major federal laws were enacted in response to the 2020 coronavirus pandemic. ![]()
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