What Now? The Economy, Investing, and Elections
Overview
Covid-19 may accelerate the impact of several already evident trends in politics, the economy, and financial markets. Will economic concentration, along with wealth and income disparity, continue to grow? The U.S. and China were already battling over trade, but will how each handled the pandemic lead to a full-blown cold war? Will globalization reverse and what does that mean for public and private investors? How will the pandemic drive November’s U.S. elections? Which industries and companies did the virus and lockdowns forever change? We will explore these questions and more during our virtual session.
Insights and Key Takeaways
What will increase the chances of this recovery? Brown says four things:
- In the face of this unprecedented catastrophe, the federal government produced a historical response achieving a $2 trillion rescue package. Globally governments pledged about $11 trillion in fiscal stimulus. Even so, debt grew faster than income. Millions of Americans will not be able to pay their debts unless these stimulus programs are extended.
- The paycheck protection program provided life support for many businesses, but it was scaled to get businesses through a short, intensive disruption. As the pandemic outlasts the relief, we will see more business failures and bankruptcies. Increased federal support is needed.
- State and city governments face a fiscal crisis and unbalanced budgets in 2020. Already we see taxes, fines and fees collapsing, leaving an approximate $11 trillion combined budget gap in local governments. Without help from Washington this means job loss.
- While economists and governments argue over economic health versus public health, Brown believes ending the pandemic is the single most important mandate to preserve the country’s wealth, health and economic function.