The US economy could be in for a bumpy ride. The world has endured the health consequences of the Covid-19 pandemic since late 2019, but the economic consequences may have only just begun.
The pandemic quickly slowed GDP growth in the United States and the government hurried with $3 trillion in stimulus spending. That spending, combined with opening economies - premature in many cases - caused GDP growth to spike.
Yet the pandemic is not over, and so valuable time and stimulus funds have been wasted. Sizable numbers of jurisdictions and citizens continue to resist simple measures to control the spread, including mask or social-distancing mandates.
So the numbers of cases continue to climb in the United States, rivaling the records set only a few months ago. Researchers project the number of deaths from Covid-19 by Feb 1 could range from 300,000 with a universal mask mandate and as many as 500,000 with restrictions eased.
The US economy is built on unsustainable debt, and recovery requires a multi-prong approach - with targeted economic stimulus along with social measures that include self-discipline, masks, social distancing and crowd avoidance. "Social norms and the behavior of peers such as friends, family members, and colleagues affect behaviors," explains a group of researchers for Applied Health Economics and Health Policy. "Herding behavior occurs when people consider a certain behavior to be good or bad based on the behavior of other people and mimic their observed behaviors."
Leadership is lacking. Of course, a vaccine will offer tremendous help, but as chaos and mixed messages continue, some behaviors will become entrenched among a sizable number of consumers as wariness and mistrust intensifies. Many consumers will save more and be less inclined to travel, dine out, join crowds in museums or concerts. Many will make do with older clothes, cars and homes. The Great Depression began in 1929 and it was not until 1933 that unemployment spiked to 24 percent.