An economics professor at Illinois Wesleyan University said a recession is inevitable, but flattening the curve on the coronavirus would limit the economic damage.
Mike Seeborg said the best we can hope for is a short-term recession.
“If the pandemic goes on for a long enough time, then it’s going to be harder to bounce back from a steep recession,” Seeborg said.
Seeborg added the $2 trillion stimulus package Congress passed last week provides a "shock" to the U.S. economy, but only buys one or two months before the economy has to start running again.
“The economy really got slammed and is in sort of an induced coma and pretty soon we need life support,” he said. “This relief legislation will bring some life support to the economy.”
If that doesn't happen, Seeborg says Congress will have to pass another financial rescue bill.
While the $1,200 payments to most American adults will provide temporary help to lower-income workers and will flow money back into the economy within weeks, those who are still able to work also play a key role in the economic recovery by how much of the stimulus money they can spend, according to Seeborg.
“Immediate spending would be good at this time, I think, to stimulate local economies and small businesses,” Seeborg said.
Seeborg added the economic shutdown has disproportionately hurt minority populations as they work in higher percentages in the industries that will suffer the most, including retail, construction and hospitality.
“A lot of minority workers are hard hit by any recession. This one seems to be particularly hard on those people because of the sectors that are hurt the most," Seeborg said.
Seeborg added workers who lack college degrees are also disproportionately impacted by any financial downturn.
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