Tashkent, Uzbekistan (UzDaily.com) -- The curtailment of the program of assistance to the population in the United States will be a new blow to the economy and intensify the negative consequences of the pandemic, experts from the Peterson Institute for International Economics (PIIE) in Washington warn in their report.

The US Congress has not yet been able to agree on a new package of anti-crisis measures, which should replace the existing programs to support the population and business - their term will expire in the near future.

Democrats propose a US$3.4 trillion package of measures, Republicans - by 1 trillion, but any compromise will lead to the fact that support will be significantly reduced. Thus, the amount of additional increased unemployment benefits has already dropped from US$600 to US$400 per week, and a quarter of the amount must now be paid by the states themselves from their budgets.

Of US$2 trillion aimed at supporting the economy, about US$ 600 billion went to help US citizens: these are direct payments of up to US$1200 for each adult and the additional benefits already mentioned above for those who have lost their jobs.

The report of the institute’s experts notes that in the event of a reduction in support to citizens by US$500 billion (that is, refusal of direct payments and a reduction in assistance to the unemployed), investments will decline by 5.2%, since companies will curtail investment projects in anticipation of a decline in economic activity.

Scaling down programs to support people will have a negative multiplier effect. A reduction in aid, according to experts’ calculations, will lead to a wider decrease in the income of the population - 1.9-2.2 times more than the saved US$500 billion, that is, by US$0.9-1.1 trillion. This will lead to an additional decline in GDP by 3.8-5% and an increase in unemployment by 4-5%. Tax revenues will also decrease: due to the shortfall in income, about half of the budget savings, which should be provided by the winding down of anti-crisis programs, will be leveled.

Experts conclude that it is now very important for the US authorities to maintain the same volume of support for the economy in order to prevent even greater economic damage.