The Coronavirus – Why the U.S. Economy Will Never be the Same
Kevin M. Bahr Chief Analyst, Center for Business and Economic Insight Professor of Business, School of Business and Economics
Hopefully the coronavirus subsides quickly and never returns. However, the impacts of the virus on the economy will remain long after the virus subsides. This article will discuss some of those impacts, after initially reviewing the economic and financial market effects of the virus. What Happened: A Review of the Economic Impacts If there was any doubt about the severity of the Coronavirus impact on the U.S. economy, those doubts came to an abrupt halt in March. The Department of Labor announced initial jobless claims soared to a seasonally adjusted 3.28 million in the week ended March 21, up from the prior week claims of only 282,000. An incredible, record one-week jump. Speaking of records, the nearly 3.3 million of initial jobless claims smashed the old record – by far. The previous high was 695,000 claims filed in the week ended October 2, 1982. Although 3.3 million was a new record, unemployment claims doubled the following week to 6.65 million. Wisconsin wasn’t immune, with initial unemployment claims skyrocketing to over 51,000 for the week ended March 21 up from only 5,200 the prior week. The following week (March 28), there were over 115,000 claims according to the Wisconsin Department of Workforce Development. 1
With rare bipartisan support, most members of Congress realized that something had to be done – and quickly.
By the end of March, Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. CARES was the largest fiscal stimulus in the history of the United States – a $2 trillion stimulus package that more than doubled the $800 billion stimulus package that was implemented in 2009 to overcome the financial crisis. Certainly, the bill was not perfect, but it created a vast array of programs with bipartisan support that would provide economic support to individuals and businesses. The funding would cover five general categories: 1) Small Business, 2) Distressed Companies, 3) Individuals, 4) Local governments, and 5) a Safety net for selected social programs. In a nutshell, the distribution of the funding:
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