Abstract
The spread of COVID-19 is one of the most impactful global events in recent years. It has destroyed the U.S. economy and financial market. In just several months, the stock market experienced major fluctuations, the entire economy has basically stopped, and the unemployment rate peaked. Its severity even penetrated people’s daily lives; many are not getting basic requirements needed for survival. As cases increase daily, more and more are concerned with how the future will look like and what this pandemic will do to the economy in the long run. Faced with many uncertainties in macroeconomic trends and the continuous spreading of the virus, I have compared this current crisis with the subprime mortgage crisis in 2008. With a goal to reasonably forecast future developments of the U.S. economy, from both micro and macro perspectives, financial market trends and government actions have been analyzed. Specifically, the two events’ causes, essences, policies’ effectiveness, and other factors have been evaluated and suggestions in adjusting government policies have also been made. Unlike the 2008 crisis, this crisis will require longer, more complex, and more flexible processes and regulations to recover, and citizens should be prepared for this slow recovery. But overall, a promising outlook for the U.S. economy still stands in the long-run.
Highlights
For the past ten years, the U.S economy has been in one of its best conditions, experiencing continuous positive growths and trends
For the first time in history, multiple circuit breakers were triggered and major fluctuations occurred in the U.S stock market
An analysis was conducted on the current policies used and financial market trends, and a prediction for the future and suggestions for changes were given
Summary
For the past ten years, the U.S economy has been in one of its best conditions, experiencing continuous positive growths and trends. The Real GDP sharply decreased at an annual rate of 32.9% in Quarter 2, breaking the record since 1947. Is the financial market greatly harmed, the daily lives of citizens are greatly affected as well. People are risking their health every time they leave their residences. According to Columbia University economics professor Dr Brendan O'Flaherty, the number of homeless people in the U.S will increase by 40-45%; as shown in Graph 3, this means homelessness in the U.S would reach the highest it has ever been at for the past 13 years. In the long run, there is still a positive outlook because the factors that support long term growth in the U.S are still in effect; some of these factors include domestic consumption, possible new investment growth, and possible technological breakthroughs
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