Just a few weeks ago, things looked good for the American economy. Economic growth was modest but steady, the unemployment rate was very low and production and consumption were steady. The Dow Jones Industrial Average was growing steadily and economists and others were predicting that the economy would continue to record modest growth.

Then, some news emanated from China about a virus that had struck some people and caused them to become very ill. Unfortunately, some of the people who became ill with the virus died. That was the beginning of the nightmare that in the past few weeks has been caused by the coronavirus.

That nightmare has many parts: the U.S. stock market has taken massive hits, reflected in the decline in that market that has, on specific days, caused the Dow Jones to decline by almost 3000 points. Various industries have been crippled by the necessity to take certain actions that are necessary to limit the spread of the virus: travel has been discouraged by health experts who are trying to limit contact with other people, hoping that this will help to limit the spread of the virus. Simple activities, such as going out to restaurants with other people, have been discouraged, and going out to the theatre with friends has also been looked upon unfavorably. In the attempts to limit these activities, the decrease in demand for them has produced the bankruptcies that you would expect: restaurants have closed, and hotels have seen a decrease in business that can only mean shrinking profits, more layoffs and more worried entrepreneurs. Of course, less travel has meant that airlines have fewer flights and shrinking profits. All of this adds up to economies that have stopped growing. In other words, these economies are beginning to suffer economic recessions.

In recent times, economists and others have described the economy in various terms, describing it as sluggish or slowly growing. In more recent days, economists and government analysts have endorsed the idea that our steady economic growth is now over, and that we are looking at an economy that is shrinking. How much it shrinks will significantly depend on how much and how fast the federal government will provide help for the economy. So far, some help has been provided.

The Federal Reserve has cut the federal funds interest rate essentially to zero. While that is important, also important is the contribution the U. S. Congress can make by passing legislation that will provide money to bolster the funds available to spend on healthcare expenditures related to fighting the coronavirus. An $8.3 billion package passed by Congress in March was a good start.

Most observers would comment that there is much to do. Particular care should be given to specific industries that are vital to the U.S. economy, such as the airline industry. While demand recedes for various goods and productive services in the U.S., the Congress can pass legislation to bolster that demand, such as giving a certain amount of money to be spent as the adult receiver of those funds would care to spend it.

This idea is not new. It was already tried during the last big recession in 2008 with some success, but the increased desire for cash from the federal government by various industries does underscore the general pessimistic outlook that the coronavirus increases in intensity and continues to spread throughout the world. It is now evident that more and more business owners and investors are conceding that the virus will take longer to fight successfully, and that more of them believe that an economic recession is now inevitable. Examples of Italy and Spain and their difficulties containing the virus there only serve to deepen the pessimism.

There is no doubt that various changes will have to be made by U.S. workers, business owners and others to adjust to the steps required by all of us in order to survive the problems to our medical and economic health that are posed by this killer virus.

Author and educator Dave Kaplan writes from his home in Santa Barbara, Calif.

(14) comments

David Collins

Investing is not now or ever been for the faint of heart . The markets are always over bought or over sold and can turn on a dime in response to a threat , real or rumored . If a perceived threat does not itself bring the market down the panic selling by the nervous nellies and short sellers often will . Way too much money to be made on the down tick . Eventually things will level out and the market will slowly regain ground . There will be consolidation due to those endeavors that have succumbed but then there always is collateral damage even in an up tick . Evolution , business style .

JusticeForAll

Don't think it will level out this time. Recovery will be painfully slow. These recent events have reshaped us. Now we just have to wait and see what happens.

David Collins

Agree Justice , to a point . Panic selling along with exuberant buying generates massive tax revenues . Revenues that are surely factored in this federal scheme to calm the panic amongst the seething masses . And then , there is the bailout for the closed Kennedy center for the performing arts . A place where one can not go to observe the fine performing arts in action due to the ban on gatherings . Only hard core liberals would consider this a priority . Yet one more example of liberal madness . Ok for you and yours to go lacking but the performance must go on . Go figure .

David Collins

One more thing . The powers that be are supposed to vote today on this obscenely expensive aid package to rescue our economy . But , buried in there is a tiny little aid package for AFRICA . This aid package reportedly amounts to 10.8 Billion for the African Development Bank , African Development Fund and The International Development Association . Supposedly this taxpayer Largess was drafted into the original bill , not the amended version. The amended version has even more little goodies totally unrelated to the advertised purpose of this aid package . It appears to me that The Swamp is alive and well , ready to put the screws to us all .

dc

The debt is so far gone it doesn't seem to matter as long as we have a strong economy & our overall health & security maintains. Believe good may come out of what could have been permanent devastation. We're not out of the woods yet & similar plights could visit us in the future & more often. If we've learned & ready with backup plans then just maybe it wasn't the end of the world for most of us. Some are calling for Communist China to account for it but no need to hold your breath.

beachmami13

Hopefully the US will follow thru with moving manufacturing medicines and medical supplies here...Perhaps they can build a big factory here in our county. Might be a good time for the government here to offer some incentives to medical companies to come here. Sure they would prob pay better salaries & more benefits than tourism jobs & maybe Carteret County could build themselves a more stable economy where ppl don't live & die by the tourism dollar.

CARTERETISCORRUPT

Nope, cannot compete with slave labor. Carteret will become one big nursing home economy, subsidized by tourism.

David Collins

That would be nice . Sadly the Feds tried to top up their supply of ventilators several years back . The companies took the down payment and failed to deliver due to buyouts by larger companies . Multinational companies . Does the name Perdue ring a bell ? The Slacker family ? Just an example not an accusation . The money is long gone and nothing has been delivered . That is what happened and it was several years back and a few administrations ago . Government is quite inept in so many ways and it shows in times like this .

beachmami13

Definitely! I grew up in DC, so I've seen it all my life. Hate all the extras thrown in as pet projects - it is ridiculous! Just like the pet projects here that our admin. seems to see as super necessary when they could be done for much less. Just turns my stomach.

CARTERETISCORRUPT

This virus is actually a war on our economy from China. The interest rate drop helps the national debt via interest on the debt. China has declared war on our economy, has killed our citizens, and it is not being noticed as such.

dc

More like they declared war on the world. Going to be interesting to see what the world does about it when it gets out of the hospitals and shelters. Good chance they've lied big time about their numbers amount other things. One source says the wet markets are business as usual & 4M from province have been released go freely amongst the world. WHO might need to explain where they've been throughout. Not much action so far. Guess the world needs to heal a little before answering the bell. Probably threw in the towel before fight even started.

David Collins

Seeing how China still makes the lions share of medical stuff , they are now offering to supply the world with medical kit . Sort of attempting to make amends for turning this virus on the world . We can not supply ourselves , never mind the world with the desired stuff and the Chinese know that . They also know the world will remember . Going for a new world order appears To be the goal .

JusticeForAll

While we should be concerned about China for numerous reasons, blaming them for the what is happening with the corona virus is absurd. Most of the viruses we have start from China because they are overpopulated and have little to no means to prevent disease because of horrible sanitary conditions. What is alarming now is how this event is being handled, here, in the United States of America. This virus should have been allowed to follow its natural course so that we could build up immunity, like we have done with most viruses, throughout history. The measures, we are taking now, are going to allow the next deadly virus to kill far more than this one. So when do we stop the quarantine? Why did we not just quarantine those who were most susceptible to this and provide measures for them to get the medical attention they required? And just for giggles, go read Dr. Anthony Fauci's newly published "Covid-19 — Navigating the Uncharted" in the New England Journal of Medicine. A little contradicting to what he is telling the public on national television.

Our economy, which was going down before this virus hit, because of the manipulated stock market, has been propelled a severe recession, at the least, and a depression, if we stay on this course. We are now a nanny state, with the amount of unemployment, which will grow exponentially. Where is all the money going to come from? The unintended consequences of this administration's actions will be unprecedented. Freedoms are going to be limited or disappear in the name of protecting us from ourselves. How many trillions will it take to sustain a country, who for some reason, can not produce enough toilet paper, but can print worthless paper money to artificially prop up the stock market, for years, no problem?

CARTERETISCORRUPT

I agree with JFA.

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