The United States is on track to see the largest global recession since World War II. Not only are our people at risk for getting sick — or worse — but millions are also getting laid off or fired because their workplaces are being closed out of fear of spreading the disease. The drop in Americans’ income has led to a drop in spending. This drop in spending is creating what one expert calls an “aggregate demand doom loop,” resulting in an increase in business closures, deeper drops in income and spending, and so on.
The good news?
The COVID-19 curve has already started to flatten, the peak has already passed in many areas, and millions of Americans have had plenty of practice shopping and otherwise interacting at safe distances. Contrary to alarmist reports and social media chatter, our willingness to move with caution is clearly evident. And this willingness will likely continue even after social distancing recommendations are relaxed.
A new normal is not necessarily a bad normal. Even if the risk of contracting COVID-19 is greatly reduced or removed, there’s nothing wrong with people washing their hands more often, disinfecting often-used surfaces, or maintaining a healthy distance if they (or someone around them) might be walking around with another infectious disease. In fact, many of us already operated this way before the current pandemic. You might call it “common sense.”
More good news?
We live in a consumer-driven economy, and the five years leading up to the outbreak of COVID-19 saw economic growth that far outpaced most other major, developed nations. While some businesses have been forever shuttered by COVID-19, many will return. New ones will launch.
While we have seen considerable economic contraction, our economy is also operating with a significant amount of pent-up demand, as millions of Americans who haven’t dealt with employment issues haven’t been spending because the businesses they would have otherwise been patronizing have been closed.
Gradually and cautiously reopening businesses — as many states have already begun to do — will provide us with valuable information about how to implement, navigate, and even celebrate our new normal.