“Recession” is too mild a word for what we are heading into as a result of the coronavirus public-health and economic shock, with its accompanying job losses and unemployment.
Think Great Depression — no, think Greater Depression, or worse — according to five economists and global strategists who have been at the top of their game in the Federal Reserve, White House and International Monetary Fund.
The U.S. economy is expected to go into a recession this quarter and next. Goldman Sachs projected a 6-percent negative growth in the first quarter, and a 24-percent contraction in quarter two, CCN reported.
There’s no way to sugar-coat it, much as President Donald Trump tried when he said five days ago that he “would love to have the country opened up and just raring to go by Easter.”
“I’d like to put it mildly, but there’s no mild to this putting,” wrote Mike Zeller, a founder and entrepreneur Coach at Rising Stars Mastermind, in a Thrive Global column. “2020 has already served up the most unprecedented moment of our lifetimes on a plate and handed it to us with a pair of latex gloves. COVD-19—or, as the kids are calling it, coronavirus, has essentially shut down the world.”
So what does a Great Depression look like? For some, it’s arrows and inversions on a graph — the opposite of a flattened curve.
Most of us can imagine what a Great Depression looks like thanks to stunning photos and haunting imagery captured by the photographers of the Farm Security Administration (FSA). A small government agency, the FSA was established by Franklin Roosevelt. Between 1935 and 1943, FSA photographers produced nearly 80,000 pictures of life in Depression-era America. This remains the largest documentary photography
project of a people ever undertaken, according to government archives.
Because of the suddenness and intensity of coronavirus-related job layoffs, economists fear this will be worse than the Great Recession — maybe even worse than the Great Depression. Even the $2 trillion stimulus package won’t hold back a recession, analysts said.
Here are five quotes by people who use the D-word on where the economy is headed, as compiled by CCN:
It’s time for investors to start seeing the D-word. The economic damage could be double 2008. The national economic lockdown just has to last a month for us to see an absolute wave of defaults and bankruptcies with no jobs for people to go back to.David A. Rosenberg, a chief economist and global financial strategist at Gluskin Sheff & Associates. Before that he was the chief North American economist at Merrill Lynch.
All of these so-called experts who think the U.S. will just suffer a one-quarter hit to GDP of 5 percent are nuts. Real GDP fell about 25 percent during the Great Depression. Since we are entering a Greater Depression with sharply higher consumer prices, real GDP could collapse by more than 25 percent.Peter Schiff, CEO and chief global strategist for Euro Pacific Capital. He predicts something much worse than the four others on this list — a depression accompanied by sharp inflation.
The shock to the global economy from COVID-19 has been both faster and more severe than the 2008 global financial crisis and even the Great Depression. Not even during the Great Depression and World War II did the bulk of economic activity literally shut down, as it has in China, the U.S. and Europe today.Nouriel Roubini, an NYU professor and former top White House economist in the Clinton Administration Treasury Department.
Famously known as “Dr. Doom”, Roubini predicted in an August 2019 Guardian guest column that the next global recession would be immune to monetary solutions. He said it would be triggered largely by politics and international relations, and monetary solutions will not be enough to stop it from hitting some of the world’s largest economies.
Listen to GHOGH with Jamarlin Martin | Episode 70: Jamarlin Martin Jamarlin goes solo to discuss the COVID-19 crisis. He talks about the failed leadership of Trump, Andrew Cuomo, CDC Director Robert Redfield, Surgeon General Jerome Adams, and New York Mayor de Blasio.
We think of a depression as a recession that is very very deep and very very long. That’s the kind of thing that could happen.Former Federal Reserve Vice Chairman Alan Blinder, a professor at Princeton. He said the U.S. has already entered a recession, and if coronavirus worsens there’ll be a depression.
Well, maybe the Great Depression.Maury Obstfeld, former chief economist for the International Monetary Fund. This is what he said when asked if there’s ever been another time in U.S. history that the economy has been so widely interrupted.
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