03-27-2020, 01:46 PM
U-shaped recessions tend to be the norm for the past 30 years. Personally, I think this attributable to stagnation in real wages over the same time period. Consumers drive the economy through demand. When consumers are strapped, economic recoveries are anemic.
$1,200 checks won't cover a month's rent, utilities, COBRA insurance, the 7-year subprime note on that Ford Raptor, and outstanding credit card debt, and the majority of Americans are lucky if they can cover a $400 emergency expense in good times.
A lot of small businesses are going to go under as a result of this, especially in areas where the economy wasn't so robust to begin with (middle America, small towns, and rural areas).
So, that's my prediction. The virus may have been the initial trigger, but I think the knock-on effects will mirror prior recessions of the past 30 years, where a strapped American consumer doesn't have much power to kick-start the economy.
$1,200 checks won't cover a month's rent, utilities, COBRA insurance, the 7-year subprime note on that Ford Raptor, and outstanding credit card debt, and the majority of Americans are lucky if they can cover a $400 emergency expense in good times.
A lot of small businesses are going to go under as a result of this, especially in areas where the economy wasn't so robust to begin with (middle America, small towns, and rural areas).
So, that's my prediction. The virus may have been the initial trigger, but I think the knock-on effects will mirror prior recessions of the past 30 years, where a strapped American consumer doesn't have much power to kick-start the economy.