This article looks at the current state of the European and American economy, specifically the actions taken during the pandemic. The global pandemic and rising inflation caused economists to predict a future recession; however, America seems to be doing the opposite of what evidence suggests. When the pandemic hit, most countries opened their spending policy in order to provide relief to their citizens. The difference between European nations and America was their level of spending, with Europe spending anywhere from $500 billion to $216 billion while America spent around $5 trillion on relief. While this amount of spending was ridiculed, it actually ended up aiding inflation in summer 2022 allowing for consumption and saving to soar. Some of the differences in the way they spent their money also influenced these countries' success rates. The American policy, which supported workers through unemployment insurance, seemed to be the inferior system, but this actually ended up helping the majority of Americans feel comfortable to find a better position while unemployed and even start their own business allowing for a spike in productivity. The reason for why America was able to achieve their aggressive agenda was because of the insane amount of government spending ($1.7 trillion more than what was taken in) which most European countries wouldn’t dare to think about.
What is Going on With Europe’s Economy?
I find it crazy how long the effects of the pandemic stem economically. Each country is faced with different issues based on how they acted during the lockdowns. There has been projections of a recession for a long time, but we have not actually had one yet. It makes me wonder how long we will og before the next recession hits
ReplyDeleteThis is quite interesting to look at how much America spent on relief for the pandemic. I didn't realize it was that much more than Europe was spending. It's weird to me how spending this much more ended up helping in summer 2022. I think the amount of spending was a good idea because it helped Americans get through a tough time financially.
ReplyDeleteReading your post made me wonder if the positive effects of America's higher spending will be taken into account in response to future events like Covid. As you mentioned, originally there was a lot of criticism, but the 2022 data has shown the higher spending to be beneficial. History repeats itself, so when we learn something new, its important to see how it may apply to other economic contexts.
ReplyDeleteThese effects are still playing out, not as drastic but still, most Americans in the housing market are basically out of luck unless you have a well above average salary. So, I think we should give it time before we really judge how it did.
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