U.S. Economy Poised to Mirror the Post-WWII Glory
Lockdown rules act like wartime rationing to curb civilian consumption. But when things open up, so do wallets.
The economy could see a lengthy rebound.
Photographer: Josep Lago/AFP via Getty Images
The U.S. government has spent $2.6 trillion to support the economy as the coronavirus pandemic spreads, and the Federal Reserve has about matched that amount in asset purchases. We’re not finished fighting Covid-19, so protecting the economy in 2020 may be the most expensive thing the U.S. has ever attempted. Consider that the U.S. spent about $4 trillion in today’s dollars fighting World War II. The good news is that the economic aftermath is likely to be similar.
I’m generally opposed to stimulus. Certainly spend to help the needy, but overgenerous compensation blunts economic signals that point to recovery. Money goes to cronies and failed businesses, hindering the innovation needed for growth. Unemployment benefits should provide a cushion, but not discourage people from seeking new skills or adapting to a changing workplace. That only extends the economic pain.