How Will Coronavirus Impact the Economy

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The US Department of Commerce has a lot on its plate these days.

Kate Shanahan, Staff Writer

It is no secret that the Coronavirus has placed a tremendous strain on the national and international economy. However, White House economic adviser Kevin Hasset reported that he expects the US is going to see an unemployment rate comparable to the Great Depression. During the Great Recession, a financial crisis around 2008, a total of 8.7 million jobs were lost. That’s how many jobs are being lost every ten days. Despite trillions of dollars in stimulus spending, 3.8 million more U.S. workers filed for unemployment bringing the six-week total to over 30 million.

A true reflection of how the economy is doing will be seen through quarterly reports released by the Commerce Department. The nation’s first quarter GDP (Gross Domestic Product) will depict the initial economic downturn due to the coronavirus. Those first figures will show the beginning of the downward slide, however the major impact will be illustrated through the numbers reflecting the second quarter GDP which will be released in July. 

The Dow Jones Industrial Average is a tool economists use to measure stock performance of thirty large companies listed on stock exchanges in the US. Around 23 March, the Dow Jones took a hit and was the lowest it’s been since 2016. However, since then the stock market has begun to strengthen as the major stock indexes confirmed a new uptrend in early April.

More likely than not, once the country is ready, the economy will come back in what is described as a “staged reopening.” A mock-up plan would be to start opening small businesses and gradually open restaurants keeping customers spread out within establishments. It is optimistically projected that the highest-capacity venues, stadiums and concert halls, could reopen in the summer. 

It is important to keep in mind that even after restrictions are lifted, the current economic crisis will continue to be unlike anything the U.S. has seen in decades. Heidi Shierholz, a senior economist at the Economic Policy Institute, noted that while the government has taken steps to deal with the economic downfall, it has not done nearly enough.  

An economics professor at Bard College. Pavlina Tcherneva, believes the government should take a more assertive approach to helping Americans during these uncertain times. Taking a more forceful intervention would include more aggressive aid to individual families and a job guarantee through public-service projects. Tcherneva suggests looking back at the Great Depression for inspiration on a solution. Back in 1933, President Roosevelt took office amidst the madness of the depression and swiftly expanded the role of the government in the economy. 

Perhaps the economic strain that the pandemic crisis has caused is a blessing in disguise. Rebuilding the economy can be an opportunity to reflect on economic policies that are currently failing us, such as the absence of universal health care and tax structures which favor the wealthy, and imagine a new economy on the other side of this crisis.