Resilience after recession: 4 ways to reboot the U.S. economy
The COVID-19 pandemic is already affecting the lives of hundreds of thousands of Americans, and it’s poised to get worse before it gets better. Our primary concern is for the health and welfare of all those affected.
The COVID-19 outbreak’s economic impacts also will be staggering and long-lasting. Every sector of the economy — from finance to airlines, retail to restaurants — is feeling the effects. Layoffs are happening across the United States. Jobless claims are skyrocketing.
No doubt, the economic hardships faced by many Americans need to be addressed. The recently passed $2 trillion stimulus package is a much-needed short-term response. My colleague Dan Lashof recently outlined three principles that should shape how the United States structures its stimulus. As he noted, we need to start looking beyond this immediate crisis to think about the future of the U.S. economy…
So, what about recovery then?
In ideal circumstances, recovery from a major disaster would be free from aftershocks. But aftershocks are the norm. Hence the question: how well are we equipped for recovery from the current pandemic? This is the time for serious thought.
Firstly, it should be noted that recovery is not easy to define. While a seemingly simple term to grasp, it is used differently in different contexts. In some cases, for example, reconstruction might be a more fitting term. Broadly speaking, recovery can be understood as an overarching process of returning to normal, which encompasses all aspects of life.
The current pandemic of a zoonotic disease is shaping up to be the greatest economic shock of the last 100 years. Professor of Economics Nicolas Bloom believes it could be five years before we reach the level of pre-pandemic economic output and warns that the current event may, in the future, be referred to as the ‘the Greater Depression”.
However, economic recovery from our current pain is expected to happen and a few scenarios on how it could unfold are already being offered, which is not surprising given the number of studies on economic crises…