The Economic Damage Brought Upon By COVID-19
Updated: Dec 31, 2020
As businesses across America close their doors due to mandatory closures as a result of the COVID-19 pandemic, citizens are voicing their opinions on the increasingly controversial state of the national economy. In a nation once praised for its record-breaking successes, basic necessities such as food and medical care are suddenly at risk. While the government is providing economic relief payments, the effectiveness of these efforts is being questioned with the growing number of unemployed. The spread of novel coronavirus originated in late December with an alarming number of cases and deaths appearing within a short time period in Wuhan, China. On December 31, after the lockdown of the economical center of central China, stocks in China-based companies dramatically plunged, sending the world into a state of alertness (Jones, 2020.) Since then, shares and values of stocks worldwide have plummeted, comparable to the Great Depression. While the COVID-19 pandemic accelerated the economic recession we see today, several factors have led to the generally massive drop in the economy. Preceding the breakout of the pandemic, the American economy was “playing out on a split screen” (Cohen, 2020.) On one side were impressive feats, soaring stock markets, increasingly large expansion, and the lowest unemployment rates in half a century. On the other side was an unfolding issue leading to the current recession. Years of little increase in wage made it difficult for workers to afford essentials. Furthermore, job benefits were little to none. At the time, every four out of ten adults didn’t have the resources on hand to cover a $400 expense (Smialek, 2019.) Following the end of the 2008 recession, wealth has been pumped out, but workers receive little of the benefit. Instead, companies gained and benefited from stockholders and were favored. “We built an economy with no shock absorbers,” said Joseph Stiglitz, a Nobel-winning economist. “We made a system that looked like it was maximizing profits but had higher risks and lower resiliency.”(Cohen, 2020.) As citizens across America find themselves with no way of generating income for their families, jobless claims have soared to over 6 million in the last week of March. (Woolhandler, 2020.) Virtually all industries have been damaged in some way or form, with the exception of remote-service companies. With lockdowns spanning across states, the U.S. government invested $2 trillion in a relief package in late March. Most people, however, argue that this investment was not enough. The package allows any adult earning under $100,000 a year to receive a one-time $1,200 direct cash payment. Additionally, $349 billion was set aside for small businesses to take out loans. Lastly, millions of Americans are now losing medical coverage due to the rising number of unemployed (Bokat-Lindell, 2020.) With this comes a feeling uncertainty in citizens nationwide as their security is lost. In a matter of 2 weeks, the funds provided by the government have been used up and unease is building. All is not without hope, however. The government is already in the works of contributing another $4 billion to relief funds, hopefully with a more successful turnout. “The first rule of virus economics is that you gotta stop the virus before you can do anything about the economics,” Austan Goolsbee, an economist at the University of Chicago, told Politico. “If we’re spending trillions, I don’t understand why we’re not throwing hundreds of billions at the things we need to stop the spread.” (Bokat-Lindell, 2020.) The economic recession caused by the novel coronavirus has sent the American economy into its worst state in decades. Millions of people are unemployed, and necessities such as medical care and food are at risk. The pandemic is above all a public health emergency. So long as human interaction remains dangerous, businesses cannot effectively return to normal. And even after the virus is contained, people may be less inclined to venture to crowded buildings and venues. But with the growing amount of support the government has been supplying and actions taken to prevent the spread of the pandemic, it is entirely possible that the nation will be able to come back and even surpass its previous state. We have to work together by helping stop the pandemic from worsening and supporting those affected by the lockdowns. Making smart decisions and abiding life with caution during these desperate times will allow a successful rebound. Coronavirus does not discriminate by social class, and this is not the time to place blame on others. Instead, maintaining faith that the current economic state will soar once again is surely a sign that anything is possible.
Jones, L. (2020, April 3). Coronavirus: A visual guide to the economic impact. Retrieved April 15, 2020, from https://www.bbc.com/news/business-51706225
Cohen, P. (2020, April 16). Straggling in a Good Economy, and Now Struggling in a Crisis. Retrieved April 16, 2020, from https://www.nytimes.com/2020/04/16/business/econ omy/coronavirus-economy.html
Smialek, J. (2020, March 26). How the Fed’s Magic Money Machine Will Turn $454 Billion Into $4 Trillion. Retrieved April 16, 2020, from https://www.nytimes.com/2020/03/26/bus iness/economy/fed-coronavirusstimulus.html
Woolhandler, S. (2020, April 7). Intersecting U.S. Epidemics: COVID-19 and Lack of Health Insurance. Retrieved April 16, 2020, from https://annals.org/aim/fullarticle/2764415/inte rsecting-u-s-epidemics-covid-19-lack-health-insurance
Bokat-Lindell, S. (2020, April 16). Will There Be More Coronavirus Stimulus Checks? Retrieved April 16, 2020, from https://www.nytimes.com/2020/04/ 16/opinion/stimulus-check-coronavirus.html