As the United States and the world continue to see a rise in COVID-19 cases, evidence of a considerable economic downturn continues to stack up.
It seems, at the moment, that aggressive social distancing measures and the resulting business slowdown are the best ways to protect the economy and to save countless lives.
Goldman Sachs economists have predicted that second-quarter GDP will drop 24% with a 3.8% contraction for the full year 2020. The bank has also stated that they expect unemployment to reach as high as 9%. In a more extreme prediction, the president of the St. Louis Fed, James Bullard, has warned that unemployment could reach as high as 30% and GDP could drop as much as 50% in the coming quarter.
While economic policy put into place so far focuses on stimulus and direct spending, there should be a heightened focus on the most vulnerable demographics in times of crisis. Despite the fact that everyone, other than essential workers, have been instructed to remain home, there are many who have outright lost their positions and sources of income.
Business closures are resulting in layoffs, as business owners and managers adjust to reducing output and to significantly less revenue. Minority group members and hourly wage workers have been most highly affected.
In a uniquely difficult time like this one, it is not all Americans who need a $1,200 check from the federal government but, for those who really need it, this amount is unlikely to be sufficient.
As economic indicators begin to show the effects of COVID-19 and predictions continue to change, more aggressive action should be taken by all levels of government to soften the effect of this crisis.