It was clear on Monday that most of the American economy was grinding to a halt, and would remain that way for months, because of the corona virus outbreak and the sweeping steps being taken to try to halt it.
When the White House warned all Americans to avoid restaurants and bars and not to gather in groups of more than 10, it left unanswered the question of precisely what individuals and local governments should do, or how business owners and workers might survive financially, at a time when vast sections of the economy were ceasing to function.
On Wall Street, brokers and analysts were acting as if an economic collapse were inevitable, despite the Federal Reserve’s emergency moves on Sunday night to stoke economic growth through an aggressive bond-buying program. The S&P 500 fell nearly 12 percent on Monday and global oil prices slid below $30 a barrel, a four-year low.
“We’re calling the recession,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We have the three elements to make that call — a profound, pervasive and persistent contraction in economic activity.”
Business groups, local and state leaders and a growing chorus of lawmakers and economists begged the federal government to spend trillions of dollars to pay workers to stay home and funnel money to companies struggling with an abrupt end to consumer activity.
The administration floated several ideas for helping industry without conveying a clear plan. After the main trade group for airlines suggested a $50 billion bailout, Mr. Trump’s chief economist, Larry Kudlow, said, “We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them.”
Employers and employees are torn between fears of being exposed to the virus and fears of running out of money to pay for food and electricity. And government officials are left with the unhappy task of shutting down businesses that provide wages for large swaths of their communities.
In Washington, lawmakers are working on a new fiscal stimulus package that could help workers and companies weather the storm — even as a previous package that the House passed last week still waits for Senate approval. Other businesses besides airlines are pushing for loans or direct government grants to fill the void of lost sales.
Reference: The New York Times
