As winter approaches, health experts are warning that the United States faces a dark COVID-19 winter. They should also be warning of a long and painful U.S. economic winter.
It is not simply that the economic recovery is at risk of faltering if the earlier easing of COVID-19-related lockdowns is at least partially reversed and if a second fiscal stimulus package is delayed until after January 20. It is also that the world’s overvalued equity and credit markets could be seriously unsettled by a double-dip European economic recession and by a serious emerging market debt crisis.
One need not be an epidemiologist to recognize that the U.S. is on the cusp of a second and more vicious wave in the health crisis. Even before the winter, the number of new daily infections in many states well exceeded its earlier summer peak. Worse yet, those infections are now increasing at an alarming fortnightly rate of around 40 percent, with little prospect of a comprehensive national plan to put a brake on the virus’s rapid spread and with little prospect of a widely distributed vaccine until the second half of next year.
To be sure, even if there were to be a major resurgence in infections, it is highly improbable that the U.S. would again go into a full economic lockdown of the sort that last spring plunged the country into its deepest economic recession in the past 90 years.
— Adam Tooze (@adam_tooze) November 3, 2020
Small Business Employment pic.twitter.com/3zoD8eaMYw
— Win Smart, CFA (@WinfieldSmart) November 4, 2020
— Danielle DiMartino Booth (@DiMartinoBooth) November 3, 2020
Our daily update is published. States reported 1.1 million tests and 87k cases. 50k people are currently hospitalized with COVID-19. Today's death toll was 1,079. pic.twitter.com/WYyAGbHb3o
— The COVID Tracking Project (@COVID19Tracking) November 3, 2020
US #COVID19 hospitalizations are rising rapidly — only 15% below the 1st and 2nd wave highs
— Gregory Daco (@GregDaco) November 3, 2020
No Insider Buying pic.twitter.com/HFHvfG2tH7
— Win Smart, CFA (@WinfieldSmart) November 3, 2020
"BCA put out a chart today that showed we need a minimum of $1.5tn in fiscal spending to keep the fiscal thrust at a neutral. If we get less…there is a good chance we could see the economy slide back into a recession."#BNNBloombergt.co/YqC3EhVYbT
— Danielle DiMartino Booth (@DiMartinoBooth) November 4, 2020