For the next seven months, President Donald Trump could be campaigning in a country haunted by fear of job loss, bankruptcy, and illness. This will require a notable pivot for the president, who has relentlessly applauded the rise in the stock market and the strength of the economy as the central argument for a second term. That is what he is now losing by exposing aspects of his administration that disappeared after those achievements.
Many economists say the federal stimulus announcing the last few hours by his administration, in tune with what the world’s largest economies are doing, will not prevent a recession. Lawmakers presented a $ 1.4 trillion emergency plan, and said that, along with other Federal Reserve measures, the bailout could inject $ 2 trillion into the US economy.
The companies’ shares have already collapsed. The calculations of private analysts is that the second quarter US It will contract around 15%, similar to Europe and below the -30% that China will face in that period. In North America, companies and schools are closing to try to contain the spread of the virus.
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Thus, growing unemployment insurance claims suggest that weekly layoffs may soon overshadow the worst of the previous economic crisis. Analysts at Goldman Sachs Bank estimate that 2.25 million Americans applied for unemployment aid last week, just over the total number of jobs created in all of 2019. Economy Minister Steven Mnuchin informed Congress that he fears unemployment may rise to 20%, practically more than double what Trump received when he came to government, after the stabilization plans for the 2088 crisis imposed by the Democrat Barack Obama
“Nothing can stop an economic recession now, ” said Aaron Sojourner, a professor at the University of Minnesota and a former White House economist. The expert added that the main questions lawmakers face are how the country can weather a recession, when they can end widespread quarantine and how enough jobs can be preserved to fuel a recovery.
The economy and politics have collided in such a profound way that no one knows how the elections will unfold in November. Trump’s fate may depend on how long the recession lasts and whether Americans consider it to be an external impact caused by nature or the result of government negligence or incompetence. Criticism of how the White House has initially moved in the face of the pandemic and subsequent reactions from the president can be a very serious cost at the November ballot box.
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“The situation is not good, that is different from saying that the president is responsible for it,” said Patrick Ruffini, a Republican strategist. “It is much easier to explain a deep recession as an act of God.”
However, voters may not feel as forgiving. The administration has repeatedly minimized the economic and health risks of the coronavirus. Just a month ago, the top White House economist suggested in a meeting with journalists that the pandemic would do little harm to growth. Just the opposite has happened.
BALTIMORE. AP and ClarĂn reports
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