As the COVID-19 outbreak fails to slow in the United States, concerns surrounding the grave economic consequences of a prolonged shutdown continue to grow. The US national deficit (total national debt) continues to increase, recently hitting $3.1 trillion, as the government proves to be less and less able to support those out of work. The fragile value of the US dollar and the global relevance of the US stock exchange is increasingly threatened. The economic future of the United States is completely dependent on the upcoming president’s ability to regain the trust of the global economic community as well as the ability for people to enter or reenter the US workforce.
As millions of Americans are laid off, including 370,600 daycare workers, it becomes increasingly difficult to imagine how the American middle class will be able to afford the cost of living for the upcoming decade. The middle class, the heart of any healthy economy, is responsible for the consumption that allows major companies to thrive and, in turn, employ millions of the next generation of the middle class workers. If the workers that support commerce and trade are not able to recycle their wealth back to their employers, either due to inadequate pay or a lack of supply of goods, this circular movement of wealth spirals out of control. It is the obligation of the government to ensure that wealth is recycled and distributed adequately in order to protect this fragile, yet essential, cycle of wealth. Now, as millions of people find themselves out of work, the government has attempted to synthesize their payments and encourage commerce, while failing to resolve the root of this disruption in the economy. The stock market reflects this discrepancy, as it continues to grow despite the obvious economic losses the US is undergoing. Experts warn of a U-shaped recession, however this prediction is dependent on the idea that this economic disruption is temporary and a vaccine is imminent. There is a high probability that this shutdown is temporary, however it is unwise to rule out the possibility that this will be the new normal for the next decade or more. If in fact this outbreak is resolved in the near future, it is assumed that our economy, prior to a steep and sudden decline followed by a prolonged plateau, will recover as more and more people return to work (in late 2020 leading into the middle of 2021). Even in this best case scenario, tens of thousands of small businesses will still never open their doors again, and hundreds of thousands of previously employed people will have no work to return to for years. These consequences will only worsen if the White House fails to regain the trust of the major companies, and it seems possible that many companies will move to better pandemic prepared nations such as China or South Korea.
In order for the US to maintain its economic strength, it is required that the White House secures employment for the middle class and to reduce the national deficit. This can be achieved through increasing taxes for the wealthy as well as reducing the cost of living for middle class Americans. No matter the actions of the White House, however, there will continue to be grave economic consequences of this shutdown.