American Economy in Collapse
Published in Frankfurter Allgemeine Zeitung
(Germany) on 27 March 2020
by Klaus-Dieter Frankenberger (link to
original)
The infection numbers for the United States are now higher than those for China, and the superpower’s economy is in free fall. The consequences will be felt across the world.
No one can say when the United States is going to recover from this dual crisis – the COVID-19 pandemic and the current recession. The president is confident that the U.S. will soon be back in “great shape.” However, his optimism is shared neither by the governors, who are at a loss as to where they can get ventilators, nor presumably by Trump’s own experts. The situation is becoming more serious on both fronts, and even more dramatic. In the United States, more people are now (officially) infected with the coronavirus than are (officially) infected in China and the rate of infection shows no signs of slowing.
Another statistic is no less frightening: In the week beginning March 16, 3.3 million Americans filed for unemployment compensation. Such a surge is unprecedented. In other words, 10 years of expansionary policy in the U.S. have been brutally brought to an end – by a virus that was, at first, completely underestimated by the government, as well as by the measures taken to safeguard the nation against this virus.
Following passage by the Senate, the massive aid package for businesses, families and the health care system has now also been passed by the House of Representatives. The aim is to prevent the economy from hitting rock bottom. If the government does not succeed in doing so, or if the measure is only partly successful, things will become incredibly painful. The consequences will be felt in many policy areas, not only in domestic policy. America’s role on the global stage will further diminish.
No one can say when the United States is going to recover from this dual crisis – the COVID-19 pandemic and the current recession. The president is confident that the U.S. will soon be back in “great shape.” However, his optimism is shared neither by the governors, who are at a loss as to where they can get ventilators, nor presumably by Trump’s own experts. The situation is becoming more serious on both fronts, and even more dramatic. In the United States, more people are now (officially) infected with the coronavirus than are (officially) infected in China and the rate of infection shows no signs of slowing.
Another statistic is no less frightening: In the week beginning March 16, 3.3 million Americans filed for unemployment compensation. Such a surge is unprecedented. In other words, 10 years of expansionary policy in the U.S. have been brutally brought to an end – by a virus that was, at first, completely underestimated by the government, as well as by the measures taken to safeguard the nation against this virus.
Following passage by the Senate, the massive aid package for businesses, families and the health care system has now also been passed by the House of Representatives. The aim is to prevent the economy from hitting rock bottom. If the government does not succeed in doing so, or if the measure is only partly successful, things will become incredibly painful. The consequences will be felt in many policy areas, not only in domestic policy. America’s role on the global stage will further diminish.
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