COVID-19 has had a multitude of impacts on our way of life through fear and caution. A pressing issue that economists have been foreshadowing for the past decade has been the possibility of another global depression much like one experienced in 1929 (commonly referred to as The Great Depression).
The United States Bureau of Labor Statistics recorded over 20.5 million Americans have filed for unemployment in April causing unemployment to increase to 14.7%. Because of this, federal spending has increased over $6 trillion dollars towards relief. Due to federal spending increasing during a time of national debt poses the issue in the United States having to deal with the looming future payment of that debt. Small businesses have taken a huge toll from this pandemic. The United States Small Business Administration used all of its funding back in February causing an increase in tensions with small business owners when the SBA temporarily got backed up in demand for relief aid. Restaurants are being massively affected by the new regulations being placed only allowing them to operate at half capacity.
Among the federal spending towards COVID-19, financial grant money from the Social Security fund has been reported to be used towards this pandemic. The Social Security fund has been a pressing issue with previous generations in regards to possible exploits on the program. Whether or not the Social Security fund will be able to continue funding for the coming generations have been seen as improbable because of the abundance of expenses the program has had in recent decades.
When President Trump took office he has made tax cuts which has been claimed estimate over $1 trillion in savings. On top of this he has saved businesses billions, leading these corporations to open up over 7 million jobs for Americans. Although President Trump has benefited the economy with these acts, it seems that COVID-19 has had a much larger impact financially that President Trump has anticipated.
The overall shock that COVID-19 has had on the United States economy has been rather large in comparison to macroeconomic reactions during the Spanish influenza. Although, how contagious the Spanish influenza is in comparison to the Coronavirus can be seen as a possible variable that can be debated, the fear factor of the pandemic remains constant.
The fear of an unknown deadly virus can be easily compared to possible psychological effects to reactions to acts of terrorism and threats that amount to increased levels of stress that typically surmount to long term developments. This can lead to possible mass hysteria on a possible virus even if there is a low mortality rate.
Typically an individuals’ assessment of a possible mortality rate is subjective to a multitude of variables causing the individuals direct actions towards the economy to be influenced with a huge fear. Officials worldwide have reported over 5.68 million cases with 355 thousand deaths. This pandemic is certainly a pressing issue and its effect on every one of our personal lives.
“Current Employment Statistics – CES (National).” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, www.bls.gov/ces/.
Mckibbin, Warwick J., and Roshen Fernando. “The Global Macroeconomic Impacts of COVID-19: Seven Scenarios.” SSRN Electronic Journal, 2020, doi:10.2139/ssrn.3547729.
“President Donald J. Trump Has Delivered Record Breaking Results For The American People In His First Three Years In Office.” The White House, The United States Government, www.whitehouse.gov/briefings-statements/president-donald-j-trump-delivered-record-breaking-results-american-people-first-three-years-office/.