{"id":820823,"date":"2021-09-27T16:44:23","date_gmt":"2021-09-27T20:44:23","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=820823"},"modified":"2021-09-27T16:44:28","modified_gmt":"2021-09-27T20:44:28","slug":"the-good-bad-and-ugly-economic-lessons-learned-from-the-recession-of-2020","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-good-bad-and-ugly-economic-lessons-learned-from-the-recession-of-2020\/","title":{"rendered":"The Good, Bad And Ugly: Economic Lessons Learned From The Recession Of 2020"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fthe-good-bad-and-ugly-economic-lessons-learned-from-the-recession-of-2020%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=820823&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/09\/GettyImages-1210689410-scaled-1.jpg?w=1200&amp;h=800&amp;ixlib=react-9.3.0\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>The American economy is still grappling with the implications of COVID-19 and the lockdown-induced recession.<\/span><\/p>\n<p><span>The Business Cycle Dating Committee at the National Bureau of Economic Research \u2014 which <\/span><a href=\"https:\/\/www.dailywire.com\/news\/the-covid-recession-was-the-shortest-in-us-history-but-we-spent-more-than-in-any-prior-recession\"><span>tracks<\/span><\/a><span> the length of American recessions and expansions \u2014 defines a recession as the time between a \u201cpeak\u201d and \u201ctrough\u201d in economic activity. Last year, economic activity peaked in February before bottoming out in April \u2014 meaning that the recession of 2020 was the shortest ever recorded in American history.<\/span><\/p>\n<p><span>Nevertheless, the federal government responded more aggressively than in any previous downturn. In March 2020, President Trump signed the $2.2 trillion CARES Act; in December 2020, he signed another $900 billion aid package. In March of this year, President Biden approved the $1.9 trillion American Rescue Plan.<\/span><\/p>\n<p><span>Some silver linings emerged from last year\u2019s recession. However, policymakers\u2019 responses to the spread of COVID-19 carry massive implications for the American economy. Here are the many lessons that Americans ought to take from the 2020 recession \u2014 the good, the bad, and the ugly.<\/span><\/p>\n<p><b>The good <\/b><span>\u2014 <\/span><b>virtual work is viable<\/b><\/p>\n<p><span>Almost overnight, millions of white-collar employees were forced by the onset of COVID-19 to begin working from home \u2014 which, for many, was a welcome change.<\/span><\/p>\n<p><span>An October <\/span><a href=\"https:\/\/www.pewresearch.org\/social-trends\/2020\/12\/09\/how-the-coronavirus-outbreak-has-and-hasnt-changed-the-way-americans-work\/\"><span>survey<\/span><\/a><span> from Pew Research Center shows that large portions of the American workforce enjoy the benefits offered by remote work. Though only 20% of respondents were working from home before the outbreak of COVID-19, over 70% were still working remotely at the time of the poll. The majority of respondents indicated that they would \u201cwant to work from home after the coronavirus outbreak ends.\u201d<\/span><\/p>\n<p><span>For most telecommuters, the lifestyle offered by virtual work appears sustainable. Nearly nine in ten said they had a \u201cvery easy\u201d or \u201csomewhat easy\u201d experience with technology and equipment; eight in ten were able to meet deadlines and finish projects on time. Two in three continued to feel motivated in their jobs.<\/span><\/p>\n<p><span>Indeed, an analysis from McKinsey &amp; Company <\/span><a href=\"https:\/\/www.mckinsey.com\/featured-insights\/future-of-work\/whats-next-for-remote-work-an-analysis-of-2000-tasks-800-jobs-and-nine-countries\"><span>shows<\/span><\/a><span> that the potential for remote work is concentrated \u201camong highly-skilled, highly educated workers in a handful of industries, occupations, and geographies.\u201d Over 20% of the workforce \u201ccould work remotely three to five days a week as effectively as they could if working from an office.\u201d<\/span><\/p>\n<p><b>The bad <\/b><span>\u2014 <\/span><b>Government will compete with private employers<\/b><\/p>\n<p><span>The combined $5 trillion in federal spending certainly played a role in stimulating the economy \u2014 especially the CARES Act, which was introduced at the trough of the recession. However, the omnibus bills created countless economic headaches and bottlenecks that persist to this day.<\/span><\/p>\n<p><span>Enhanced federal unemployment payments introduced by the CARES Act \u2014 and extended through September 6 by the American Rescue Plan \u2014 created a significant worker shortage felt across the entire economy. The federal government thereby signaled a willingness to compete with private employers for jobs \u2014 or lack thereof.<\/span><\/p>\n<p><span>Polls reveal that a significant number of Americans may have been choosing to collect state and federal unemployment checks rather than returning to the job market. For instance, Morning Consult <\/span><a href=\"https:\/\/www.dailywire.com\/news\/report-1-8-million-americans-have-turned-down-jobs-to-stay-on-unemployment\"><span>found<\/span><\/a><span> that roughly one in eight jobless American adults had turned down offers while unemployed because they \u201creceive enough money from unemployment insurance without having to work.\u201d<\/span><\/p>\n<p><span>Since 14.1 million adults were collecting benefits in late June, Morning Consult inferred that roughly 1.8 million Americans may have turned down jobs to continue receiving the federal handouts.<\/span><\/p>\n<p><span>At the same time, a record number of jobs were available in the American economy. The United States Department of Labor data revealed that as early as June, the number of open positions had <\/span><a href=\"https:\/\/www.dailywire.com\/news\/job-openings-surpass-10-million-for-first-time-ever-as-americans-continue-to-cash-unemployment-checks\"><span>increased<\/span><\/a><span> to 10.1 million, Meanwhile, 8.7 million Americans were searching for work \u2014 implying that the number of openings significantly exceeded the number of jobless workers.&nbsp;<\/span><\/p>\n<p><span>The federal government also signaled new degrees of willingness to spend in a fiscally irresponsible manner.<\/span><\/p>\n<p><span>According to data from the Federal Reserve Bank of St. Louis, the total federal debt in the first quarter of 2020 was $23.2 trillion. By the second quarter, it <\/span><a href=\"https:\/\/fred.stlouisfed.org\/series\/GFDEBTN\"><span>rose<\/span><\/a><span> to $26.5 trillion \u2014 marking a <\/span><a href=\"https:\/\/fred.stlouisfed.org\/series\/GFDEGDQ188S\"><span>jump<\/span><\/a><span> from 108% of gross domestic product to 136% of gross domestic product.<\/span><\/p>\n<p><span>In the second quarter of 2021, federal debt reached $28.5 trillion \u2014 and Democrat leaders in Congress are now attempting to <\/span><a href=\"https:\/\/www.dailywire.com\/news\/analysts-democrats-3-5-trillion-spend-may-cost-5-5-trillion\"><span>pass<\/span><\/a><span> a $3.5 trillion social spending package.<\/span><\/p>\n<p><span>As discussed by the Penn Wharton Budget Model \u2014 a project of the University of Pennsylvania\u2019s Wharton School that evaluates public policy proposals \u2014 deficit spending is deeply <\/span><a href=\"https:\/\/www.dailywire.com\/news\/analysis-deficit-spending-is-deeply-harmful-to-long-term-economic-growth\"><span>harmful<\/span><\/a><span> to long-term economic growth. This reality is explained by the crowding-out effect \u2014 a phenomenon by which government demand for funds diverts money away from private business investments, which depresses rates of entrepreneurship and innovation over time.<\/span><\/p>\n<p><span>The effect of deficit spending on the capital stock \u2014 the number of productive assets used to produce goods and services \u2014 is severe. According to the Wharton economists, the capital stock would fall 0.78% by 2050 with $1 trillion in new deficit spending. With $10 trillion in spending, the capital stock would fall by 8.59%.<\/span><\/p>\n<p><span>Voters can easily become hooked on government aid, despite the long-term fiscal consequences. A Quinnipiac University <\/span><a href=\"https:\/\/www.nytimes.com\/2021\/02\/03\/us\/stimulus-check-polls.html\"><span>poll<\/span><\/a><span> conducted in February 2021 \u2014 nearly one year after the 2020 recession had reached its worst point \u2014 showed that 78% of Americans, including 90% of Democrats and 64% of Republicans, supported an additional round of $1,400 stimulus checks. Voters also showed 68% overall support for President Biden\u2019s stimulus package proposal.<\/span><\/p>\n<p><span>Indeed, of the many precedents set by last year\u2019s recession \u2014 both positive and negative \u2014 perhaps the most significant is the explosion of government involvement in economic management.<\/span><\/p>\n<p><b>The ugly \u2014 anything can happen<\/b><\/p>\n<p><span>The 2020 downturn came like a thief in the night.<\/span><\/p>\n<p><span>As originally described by mathematician Nassim Nicholas Taleb, a \u201c<\/span><a href=\"https:\/\/www.penguinrandomhouse.com\/books\/176226\/the-black-swan-second-edition-by-nassim-nicholas-taleb\/\"><span>black swan event<\/span><\/a><span>\u201d is a \u201chighly improbable event with three principal characteristics\u201d \u2014 \u201cit is unpredictable,\u201d \u201cit carries a massive impact,\u201d and \u201cafter the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was.\u201d&nbsp;<\/span><\/p>\n<p><span>The rise of Google and the 9\/11 attacks, for instance, were black swan events. COVID-19 and the subsequent economic fallout were no different.<\/span><\/p>\n<p><span>The United States was about to enter its eleventh straight year of economic expansion. Largely on this basis, several institutions predicted that the United States was fairly likely to experience a recession in 2020. Forecasters surveyed in November 2019 by the National Association of Business Economics downgraded their odds of another recession from 60% to 47%. In February 2020, MIT\u2019s Sloan School of Management <\/span><a href=\"https:\/\/www.cnbc.com\/2020\/02\/05\/70percent-chance-of-recession-in-next-six-months-study-from-mit-and-state-street-finds.html\"><span>estimated<\/span><\/a><span> a 70% chance of recession within six months. Also in late 2019, Bloomberg <\/span><a href=\"https:\/\/www.statista.com\/chart\/19873\/chance-us-recession-decreases\/\"><span>forecasted<\/span><\/a><span> a 26% chance of a downturn.<\/span><\/p>\n<p><span>The onset of the recession was far more sudden than any leading analyst predicted. Both the Dow Jones Industrial Average and the S&amp;P 500 were trading at record highs in February; one month later, both indices saw their <\/span><a href=\"https:\/\/www.marketwatch.com\/story\/5-reasons-coronavirus-crushed-the-dow-and-left-global-financial-markets-broken-this-week-2020-03-13\"><span>worst<\/span><\/a><span> one-day plummets since the crash of 1987.<\/span><\/p>\n<p><i><span>The views expressed in this opinion piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/span><\/i><\/p>\n<p><i><span>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/span><\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i><span>member<\/span><\/i><\/a><i><span>.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The American economy is still grappling with the implications of COVID-19 and the lockdown-induced recession.The Business Cycle Dating Committee at the National Bureau of Economic Research \u2014 which tracks the &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-820823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/820823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=820823"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/820823\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=820823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=820823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=820823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}