We are seeing two different approaches to consumer economic stimulus across North America. The Unities States is leaning towards a simplistic approach of putting money into the pockets of their citizens quickly and with little determination of need. The thought is to get liquidity into the consumer markets as soon as possible.
This approach differs from the Canadian stimulus package that mixes a variety of tax credits, adaptations of existing programs and loan relief. This is designed to stimulate the economy first through optimism, help those who need it most and then through impacting the broader economy. On the surface, it appears that the Canadian government is looking to mitigate the losses to the average Canadian and will worry about the broader economy through other means.
There is also a large difference in the message. The Canadian message is tangled in departments, applications and waiting period, the American message is that they are trying to mail a cheque.
The economic stimulus comes in many forms, impacting long-term and short-term market liquidity. It does appear that the Canadian package has significant benefits through providing liquidity to the broader economy through business, while the US hopes to inject immediate market impact through consumer liquidity and subsequent consumption.
Only time will tell what is the more effective measure and students will be studying this for years in Econ classes.
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