During this past quarter, the GDP of the economy has plunged at a record rate of 31.4 percent. This drop in GDP is the biggest drop in US history. With this news, the economy is in fact expected to rebound in the present quarter we are in. Some even expect it to swing back at a record breaking increase and economists believe that the economy will expand at an annual rate of 30 percent in the current quarter due to a lot of businesses starting back up.This quarters growth will not be announced until October 29 which is 5 days before the election. With Trump's second term somewhat hinging on a rebound economy, many economists believe even with the expected increases it is still a long shot to see such improvement so quickly. Even with all this expected increase there is still a big chance that the economy can retopple back into a recession if congress fails to pass another stimulus bill.
Do you think that the stimulus bill will prevent the economy from going back into a recession ?
I think that there is just too much uncertainty with what is going to happen with the number of cases. I think we are almost at a waiting stage right now to see if cases will rise going into the fall/winter months like scientists were expecting. I really don’t think that another round of stimulus, especially if it is a smaller amount than previously, will have as much of an impact on the economy as we would like.
ReplyDeleteIf a stimulus bill passes, no matter how generous, I doubt it will cause a rapid return to pre-pandemic levels of unemployment and growth. That is not to say there will be no growth, or that a stimulus bill is not necessary. However, it would be unduly optimistic to expect consumers to spend at the levels they did before the pandemic until there is a vaccine. A good example of this is the Chinese city of Wuhan, where the virus began. Despite experiencing almost no new cases, consumption in the city has not reached pre-pandemic levels.
ReplyDeleteI think that a stimulus bill would do a lot more for just helping people get by and businesses stay open. It would allow for an increase in consumption but I do not think that it would cause a large jump. I do think the growth in this quarter will be very important to the Trump campaign if there is an decent amount of growth however if there isn't then the Biden campaign will have the advantage.
ReplyDeleteI do not see a stimulus bill preventing a recession. I believe people will be afraid to spend it, or put it towards past debt, which will not stimulate growth in the economy. Until there is an increase in consumer confidence, I see spending growth staying low due to the effects of covid.
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