The University Of California at Berkeley recently held an online forum to discuss, the impact to the US economy that the coronavirus could have - in the months and potentially years to come. The acclaimed speakers recommended that the federal government, mount a response to lessen the impact that the pandemic would have on all sectors of society. The call was for a recovery program focusing on workers and communities that were “bearing the brunt of the crisis”.
Such a recovery program would cost trillions of dollars but would undoubtedly, lessen the time for recovery. It would also reduce distress on businesses and workers. The director of Berkeley’s Institute for Research on Labor and Employment (IRLE) Jesse Rothstein stated that, we were headed, “to something much deeper than the Great Recession, and comparable to the Great Depression.” The extent of the economic impact, would relate to the scale and speed of the governmental response. Everything would depend on the ability to, keep firms and their workers afloat.
Data that was shared and discussed at the Berkeley forum said that, COVID-19 could shut down up to 1/3 of the US economy. Millions could be filing for unemployment every week – an estimated unemployment rate could be as high as 25%. Up to a quarter of California’s tax revenue is expected to be lost. There has been no precedent for such a sudden economic shock in U.S. history.
Suggestions provided by attendees to offset the damage are to further expand, the current federal relief package. This could be implemented by expanding the food stamp program, increasing support for renters, and enhancing aid to state governments.
Attendees agreed that the economy was strong before the outbreak and had the potential to bounce back, “the nation has the capacity to invest in recovery”, the experts said. They did stress that “… carefully targeted policy will be essential.”
They also warned lawmakers who wanted to prematurely restart the economy that, “pitting public health against the economy is a false choice.” It was stressed that public health is a required first step to economic recovery.
The sentiment was summed up by Henry Brady, dean of the Goldman School of Public Policy, “We have to think about how, by investing in people, we actually make the society better.”
The economic impact of the COVID-19 pandemic, is likely to include similar parameters across the globe. While the scale or degree of each of these parameters, could vary from nation to nation – this report should be an eye opener to all governments. Nations that rely on US markets for their products, will be severely jolted. While it is true that public health should come before economy, a prolonged pandemic could make economic recovery extremely challenging.
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