Could The U.S. Economy Withstand Coronavirus Crisis by Itself

03 Dec, 2020 | Articles

The novel coronavirus has brought the global economy to its knees by bringing industries to a standstill. The U.S. is just as vulnerable as any other part of the globe. The country's government has sealed its borders to control a possible outbreak of disastrous proportions. The economic effects of the pandemic have already, to an extent, gone beyond control. The country's aviation sector was the first to crumble, followed by the oil and gas sector. The U.S. government has taken drastic measures that were long overdue to prevent a deeper economic downturn.

Quarantine of workers and shut down of factories have bruised the supply chain across the country. With a direct hit on the economy, the stock market has collapsed with no signs of recovery until the situation is under control. International trade has been discontinued as a measure to control the spread of the virus, which has sharply increased the demand for everyday commodities among the country's populace.

The U.S. government is handling the current pandemic based on the grounds of the 2008 economic crisis. It is swamping markets with liquidity, similar to what was done in 2008, which might not help with the situation as further cuts in interest rates are no longer translating into growth. Clearly, the U.S. economy does not seem capable of withstanding coronavirus in isolation. The crisis we are currently facing is different in its origins and needs appropriate measures in line with the severity of the pandemic and its effect on the economy.

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 U.S. Consumer Spending Trend
 U.S. Consumer Spending Trend

 U.S. Consumer Confidence Index
U.S. Consumer Confidence Index

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What Measures Can The Country Take At The Moment?
  • On an immediate basis, government-supported banks could provide discounted loans and subsequently increase their period and tolerance of late repayments. This will help build confidence among businesses that are risking bankruptcy because of the absence of customers and supplies
  • Approximately 57 million people in the country are hourly contractors, which are currently under severe threat as they are on the front foot and engaging with a lot of people. Thus, these workers need to be ensured basic pay by the government until the situation is under control.

The situation is leading us towards the worse scenario since the country governments are not cooperating and collaborating for the solution. Cure for coronavirus will be the game changer for the economy crisis, as it will boost the consumer confidence and will be successful in fetching the investments and trades for better tomorrow. Ultimately, the vaccine for coronavirus is the only hope to saving countless lives and as well the economy from a dramatic fall.

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