By Javier Boersma
COVID-19 has affected many parts of our lives, such as school, holidays, work and, most “importantly,” the economy. Due to worldwide lockdown and social distancing orders, many industries have suffered greatly, especially the travel and entertainment industries. With the spread of COVID the U.S. economy suffered during the beginning months of lockdown. The economy was even on the brink of a recession, so what happened and why did the recession never come?
We can look to the government for answers. Due to the possibility of a recession on the scale of the 2008 financial crisis or even an economic depression like the Great Depression, the government acted fast in responding to avoid such a catastrophe. With Congress quickly passing the CARES Act and the federal reserve printing out more money. Through this, the government was able to bailout those industries “too big to fail.” these included airlines, certain entertainment industries and more. These bailouts, although increasing certain debts as well as potentially devaluing our dollar, brought many large industries back from the edge and the stock market recovered from the dip seen in March 2020.
The question must be asked, however, how long can these industries be supported artificially by this bailout and how our economy will look post-COVID. Critics point out that these bailouts and large printouts of currency only temporarily solve our problem and pass them on to the future generations to pay the debt incurred during these bailouts. However, the CARES Act also “bailed out” the millions of Americans who were newly out of work due to the pandemic, this along with the economic bailout brought America as close to back to “normal” as possible. However, many argue that we should carefully monitor what we do to avoid a problem because, somewhere down the line, someone has to pay for it.