American authors David Lynch and Heather Long explained in the article that forcing 80 million Americans to stay at home today has caused the majority of businesses to stop working in the United States.
And they mentioned that millions of workers who are unemployed due to the economic collapse resulting from Corona, exceed the efforts of the federal government to respond, with the Senate rushing yesterday to complete work on the financial rescue package that the White House and the main legislators greatly expanded its scope to exceed the original amount that was proposed a few days ago. A few is a trillion dollars.
An unprecedented stop
They noted that with each passing day, the unprecedented halt to business is intensifying as restaurants, cinemas, stadiums and offices try to protect themselves from the epidemic.
America's Merrill Lynch is likely to announce this week that nearly three million Americans may apply for unemployment assistance, a number more than four times the record set during the height of the recession in 1982.
The authors add that the sudden shift in the US economy has no parallel in history. At the beginning of 2020, this economy had been expanding without interruption since mid-2009. The unemployment rate was at its lowest level in half a century, and the stock market headed towards a record high.
Now the economy is screaming and the stock market is declining in free fall. On Thursday, the three major automakers said they would close their factories on March 30, and Marriott, the world's largest hotel company, would shut down hotels and lay off thousands of workers.
An amazing coup of the economy
"A staggering coup d'etat, from the best in history to the worst in history in just two months. The fastest recession in history. With no one spending any cent, it will stay that way," chief financial economist at MUFG bank Chris Robke wrote in a note to clients. For a long, long time. "
"What is happening is just the beginning of a situation that will lead to an increase in the unemployment rate to 20% from 3.5% now," an economist at GB Morgan Chase, told clients at a conference call on Friday.
The authors describe the astounding total cost estimates of the epidemic, and they attribute to Bridgewater Associates Investment Company saying that the economy will shrink over the next three months at an annual rate of 30%, while Goldman Sachs expects a decline of 24%, and JPMorgan Chase estimates it at 14%.
The Washington Post: Corona turned the US economy upside down (Getty Images)
Getting out may not be easy
The economist Janet crossed for. "We are living with something very serious. If companies suffer such losses and are forced to fire workers and go into bankruptcy, it may not be easy to get out of that," the former Federal Reserve chair Yellen said about her concerns.
Most economists expect the economy to start coming out of its deep hole in the second half of this year. But these expectations depend on controlling the epidemic and on the United States and other governments by enacting policies that prevent permanent damage to factories and financial arteries.
Bridgewater, Goldman, and JP Morgan expect that even if all this happens, the US economy will be smaller at the end of this year than it was in the beginning.
Americans have never accepted this transformation
In fact, the authors, Lynch and Long, say that no one knows what will happen in months from now. No one on Wall Street or in Washington has any experience dealing with this type of sophisticated threat that has turned American life upside down.
Legislators' willingness to support massive spending and bail-out of companies indicated that Americans are increasingly realizing that the fight against the Corona virus involves a stark choice between health and wealth.
Source : The Washington Post
