What’s Next For The U.S. Economy

by Susan Sun Nunamaker · June 24, 2020

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For updated global info & data on COVID-19, please click HERE.

For updated global data & graphs on COVID-19, please click HERE.

For COVID-19 cases and death counts in USA by state, please click HERE.

For COVID-19 cases in Florida, please click HERE.

Many of us are wondering about what will happen next to the U.S. economy. So, let’s listen to what some expert economists have to say about this topic. Firstly, Nobel Prize-winning economist Joseph Stiglitz says U.S. government stimulus programs have failed to help the most vulnerable workers and companies during the coronavirus pandemic. He discusses longer-term challenges facing the U.S. economy and education system and explains how a younger generation of workers can retrain for jobs in the future, in the video “Whats Next For The U.S. Economy: Joseph Stiglitz“, below:

Moody’s Analytics Chief Economist Mark Zandi says investors are too optimistic about a quick economic rebound from the coronavirus pandemic. He explains what policymakers should do to boost the recovery and discusses longer-term changes in the economy, in the video “What’s Next For The U.S. Economy: Mark Zandi“, below:

Mohamed El-Erian, chief economic advisor at Allianz, says the stock market is in a “win-win” mindset as the Federal Reserve provides continued stimulus. He warns of distorted “zombie markets” and explains how some sectors will benefit while others will miss out during the economic recovery. Beware not just of “zombie” companies but of “zombie markets” as asset prices become distorted and detached from fundamentals, warned Allianz chief economic advisor Mohamed El-Erian. “I think we’ve got to be careful about zombie markets,” he said. “We’re not there yet, but we’re starting to get close.” “Zombie” companies continue to operate by borrowing money, even though they are unable to pay off their debts. Record low-interest rates have contributed to a growing number of such firms over the past decade. “They eat away at the dynamism of an economy, they misallocate resources and they eat away at productivity,” El-Erian said. “So you may be keeping them alive today, but it comes at a cost.” El-Erian said “zombie markets” might occur when central banks like the Federal Reserve continue to prop up assets, destroying the market’s ability to allocate capital efficiently. “Zombie markets are markets that are completely mispriced, they’re completely distorted,” El-Erian said. “Why? Because there is a policy view that you need to subsidize everything in markets for now.” The Fed has taken extraordinary steps, including pledging to buy corporate debt and unlimited amounts of Treasurys, to keep the financial system running smoothly during the coronavirus recession. On Monday, the central bank said it would expand its purchases in the credit market to include individual corporate bonds. The Fed’s aggressive actions have helped stocks recover from big losses earlier this year when the coronavirus pandemic started to spread across the U.S. The S&P 500 has surged nearly 40% since March 23, when the Fed first announced it would buy corporate bonds, even as parts of the economy came to a standstill and unemployment surged. El-Erian said the Fed’s actions have created a “win-win” mentality in the stock market, as many traders expect the central bank will continue to buy assets including equities in order to prevent a financial crisis. “The mentality of the market is if they’re willing to do high yield, they’re willing to do equities, because after all, the last thing the Fed wants is a financial crisis to make the economy worse,” he said. “The market feels very strongly that it basically is holding the Fed hostage.” In the video “What’s Next For The U.S. Economy: Mohamed El-Erian“, below:

Berkshire Hathaway’s chairman and CEO Warren Buffett sat down with CNBC’s Becky Quick on Monday to answer viewer questions and discuss the top news stories of the mornin, in the video “Watch CNBC’s full interview with Berkshire Hathaway CEO Warren Buffett“, below:

On April 21, Senator Mitch McConnell stated he was in favor of the idea of letting states declare bankruptcy. The statement was met with fierce backlash from several politicians and sparked media commentary. While states cannot currently legally file for bankruptcy, some in the legal and political world are supportive of the idea, as many states are suffering significantly due to the coronavirus pandemic. Allowing states to go bankrupt would be a complex process, and not at all an option without significant risk, in the video “What Would It Mean If U.S. States Went Bankrupt?” below:

Over the last few months, businesses have been put under extreme amounts of stress to say the very least, in the video “We Are Entering “The Lost Decade” – The Economic Collapse of the 2020’s“, below:

In the first of a two-part interview, Influential economist David Rosenberg explains why “nothing is normal” after the COVID-19 pandemic. This is a picture that Rosenberg has been painting ever since the pandemic hit. And well before that he was deeply concerned about the economy’s weakness and the stock market’s vulnerability. Dave Rosenberg is President, Chief Economist and Strategist at his independent economic consulting firm Rosenberg Research & Associates which he launched early this year with the stated priority of “…providing investors with analysis and insights to help them make well-informed investment decisions.” He is known for his tell-it-like-it-is commentary, independence of thought, and high conviction calls which are frequently far out of the consensus. He will not disappoint in this interview as we discuss why “nothing is normal.” In the video “Why Nothing Will Be Normal*“, below:

Perhaps a look at what’s been happening in other countries would enable us to better anticipate what might happen in USA in the future, in the video “Covid-19: why the economy could fare worse than you think, The Economist“, below:

Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker

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What’s Next For The U.S. Economy

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