Abstract
The impact of the COVID-19 Pandemic has been staggering for the entire US economic system. Entire industries have been thwarted from operating on any sustainable level. In response, Wall Street reacted with a resounding CRASH… and so… the need for federal intervention became a stark reality for the US economic system’s survival. As major retailers collapse into bankruptcy, the need for continued federal financial support is tantamount to survival for a wide array of fledgling companies. Will the CARES legislation be sufficient to prevent a United States’ economic freefall?
Highlights
The problem of how-to arrest the flow of corporate failures and thwart an epidemic of bankruptcy filings is currently the primary focus of the US economic system (Parrott et al, 2020)
The impact of the COVID-19 Pandemic has been staggering for the entire US economic system
Whether the provisions of the CARES Act, which includes a multitude of tax reduction provisions and cash flow assistance remains questionable, at best
Summary
The problem of how-to arrest the flow of corporate failures and thwart an epidemic of bankruptcy filings is currently the primary focus of the US economic system (Parrott et al, 2020). Entire Industries, including: Retail, Airline, Cruise Line and Hotels, were preventing from operating on any sustainable level as a result of a federal mandate (Snell, 2020). The inability of major segments of the US economy to function on any sustainable level, required a financial bailout. The federal government became the independent 3rd party financial funding source disguised as legislation (McConnell, 2020). The question that loomed large on the minds of the investment community was: “What can Congress due to prevent a crash that would exceed even the 1929 debacle?” The answer was presented in the form of a legislative pronouncement known as the CARES Act.
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