Coronavirus Confronts US Economy With Tough Recovery

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Coronavirus is already the most serious threat to the U. S. economy since the financial crisis and D. honorable when markets editor at Axios says the dominoes are aligned for a severe recession that could erase much of the eleven your recovery Dionne explained as the court of viruses kind of exploded or really started to ratchet up here in the U. S. and also in place parts of Europe and around the globe a lot of folks have been asking the question is this going to cause a recession and I want to take a step back and point out a lot of the economic issues that particular facing United States right now but it's kind of gotten less attention have been swept under the rug a little bit that we put them all together sort of form this series of dominoes that really could set us up for a pretty tough recession right so some of these bullet points you get to get that you put together really raise some eyebrows like with one first off growth has declined over the last couple years yeah so explain that explain them or otherwise that could been getting glossed over well the growth rate in the U. S. has been declining even though you had this two trillion dollar tax cut the tax cut and jobs act was passed in twenty seventeen that was supposed to kind of kick start the economy is going at three four percent growth and it has been and not only have we not hit that three or four percent number we kind of we got close to it the year after the tax cut was passed and you've been declining ever sent so you've got not only the increase that two trillion dollars to that to the national debt but you had declining growth and economists were expecting a decline even further this year even absent this corona virus scares so we're kind of moving back toward slower growth books you know depending on who you talk to depending on how they did their metrics were expecting about two percent while under maybe a little over but the difference between two percent and recession is a lot less than the difference between three or four percent and recessions are so would you reference the the the tax cut and jobs act speaking of jobs up some was able was a labor markets done well why is this a concern but you see a lot of these are coming out the high paying jobs that we necessarily like to see a lot of these are these kind of service industry hourly positions while these folks don't have if they do have health insurance they don't have particularly good health insurance they are what would be classified as under insured that's one issue also they can't really take time off so I live in talking to a number of economists are they talk about a lot of folks will get sick and they won't miss work to keep going and potentially spread the disease to other people and then people who do stay out and miss work they're looking at you know getting either fired or having their wages docked and they can't afford that the the Brookings Institution study that came out in January found out that forty four percent of all U. S. workers earn barely enough to live on the averages about eighteen thousand dollars a year or about ten dollars a little more than ten dollars an hour when you make that a lot of times and some of the less expensive cities around the country you can afford to live to kinda get by him to your day to day routine but you're not able to put savings away for a rainy day for a time when you get sick so you just try to barrel through and if you can't build through you end up missing work and then maybe you don't make certain payments and certainly you're not going out to eat you're not going to the game hanging out with your friends things like that that really keep the economy moving speaking with Dion rebel in markets editor at axial C. although also writes the axial markets newsletter this piece is called the next dominoes in the corona virus economy you reference to obviously the president trump mentioned he'd like to see something along the lines of a payroll tax cut or some of the relief is that's a a political possibility it it's a political possibility not a good one because right now with the president has talked about is he wants targeted tax relief force in these industries maybe a cut in the payroll tax and the Democrats have come come back and said Hey you know we're not even interested in talking about more tax cuts what they want to do is they want to do it on the spending side and it's just kind of this ideological Democrat versus Republican ideals and I spoke with economist Claudia Sahm forward this piece and what she said was the the real issue is that they don't seem to understand no one on Capitol Hill understands that what we need is just a big package that says Hey the government's got this we're behind you we're gonna authorize a lot of spending to make sure the economy stayed on course and the people get the money they need to keep

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