https://www.forbes.com/sites/kotlikoff/2020/03/21/a-coronavirus-end-game-that-avoids-a-depression/#9543e1f5798f
The federal government is playing tragic catchup with the Coronavirus, which is now quickly turning into economic and health Armageddon. Absent immediate articulation of a clear and effective national health and economic policy, our governors need to step in to guide federal policy with a clear and single voice.
Short of the Trump Administration immediately taking appropriate steps (discussed below) to control the spread of Coronavirus or the discovery of a miraculous cure, we’re heading toward a full-scale depression. Goldman Sachs is forecasting a 24% drop in second quarter GDP. To put this figure in perspective, the maximum GDP-decline in the Great Depression (GD) was 26% and this took three years, not three months. The unemployment rate peaked during the GD at 25%.
In today’s economy, unemployment at such a rate would entail 36 million people out of work. The process has started. Over the past week, claims for unemployment jumped 70,000 — the biggest increase since the Great Recession. Kevin Hassett, former Chairman of the President’s Council of Economic Advisor, believes we could see 1 million people lose their jobs over the next month. Secretary Mnunchin recently raised the specter of a 20% unemployment rate if congress doesn’t pass a fiscal relief package. Since such a package will likely have very little impact on employment, he’s actually simply predicting one in five working Americans will be tossed to the street.