The second quarter gross domestic product report released on Thursday showing the US economy shrank 9.5% from April to June was not pretty. But while it’s no surprise that the coronavirus pandemic has hurt the economies of virtually every country in the world, our economy is now rebounding and the damage it suffered was not as severe as it was. they could have been.
Let’s start with an important fact: The economic shutdown in the United States was bipartisan, just as shutdowns around the world had the backing of multiple political parties. The coronavirus originated in China and has spread to all corners of the globe regardless of the ruling political parties.
US governors on both sides shut down their state economies in response to advice from non-partisan public health experts. It was about fighting the spread of the coronavirus, reducing its impact on our health care system, and protecting the health and lives of the American people.
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Democrats and Republicans knew the shutdowns would have economic ramifications, but most felt the compromises were worth it. As expected, we are currently experiencing these economic consequences in terms of high unemployment and slowing growth.
This makes it especially troubling that alleged Democratic presidential candidate Joe Biden is trying to blame President Trump for the long-awaited economic consequences of the bipartisan shutdown. Reacting to the decline in GDP in the second quarter, the former vice president said that “the depth of economic devastation our nation is experiencing is not an act of God, it is a failure of the presidential leadership.”
Biden’s claim is particularly hypocritical because the “depth of economic devastation” he refers to has been exacerbated by states whose Democratic governors (such as California and New York) continue their economic shutdowns to varying degrees. If you think it’s a good idea to continue with the closings, you should at least be prepared to accept the consequences of high unemployment and negative growth.
Complaining about the consequences of your actions while simultaneously advocating actions that will make those consequences worse is a level of hypocrisy seldom seen even in American politics – and it says something.
the coronavirus originated in China and has spread to every corner of the globe regardless of the political parties in power.
So, let’s take a closer look at the numbers. According to the Bureau of Economic Analysis, our country’s GDP suffered a predictable blow during the peak months of the global COVID-19 crisis by contracting 9.5% in the second quarter of this year compared to the previous quarter – or 32.9% on an annualized basis.
The annualized drop of 32.9% (from the previous year) is what you may have seen making headlines, rather than the much less frightening drop of 9.5% quarterly (quarter vs. previous quarter) because the annualized rate is what journalists are used to. normal use.
But these are not normal times. The annualized measure of GDP growth is useful when trying to gauge the performance of the economy during a period of relative stability, but the current crisis is unprecedented.
In these times, the progress of the economy as we emerge from closure is best represented by measuring it against the previous quarter than the year before. The same will be true for the figures for the third quarter (which will be significantly improved, in the absence of a resurgence of the virus).
It is also important to keep in mind that our economic policies have not created this cliff.
In fact, “the US economy entered this contraction on a healthier and more resilient basis than it did before the 2008-09 financial crisis and relative to other advanced economies,” the Council wrote. economic advisers in a recent press release. “In addition, thanks in part to a growth-oriented policy, the United States had the highest growth rate among the G7 countries before the pandemic, with growth around double the G7 average. American since President Trump took office until the end of 2019. ”
Our economy would undoubtedly have taken a much bigger step without its strength before the shutdown thanks to the pro-growth economic policies of the Trump administration.
The actions of the Trump administration after the pandemic also lessened the economic impact of the coronavirus.
Much like the initial wave of job losses in March and April, the decline in GDP in the second quarter was anticipated – which is why the administration worked with Congress to pass the CARES Act ensuring that working families and small businesses would have the financial means through the pandemic.
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Thanks to this bipartisan economic relief legislation – including stimulus checks, small business loans and emergency unemployment benefits – the U.S. economy is rebounding much faster than most pundits do. had planned.
In May, our country regained 2.7 million jobs that had been lost during the pandemic, shattering all previous records of job creation. We did even better in June, with 4.8 million additional new jobs. Even the most optimistic economists have failed to predict these historic gains. While the coronavirus will influence the speed of recovery, we will recover.
Everything indicates that the worst of the pandemic will be over by inauguration day in January due to either improved therapy or a vaccine and thanks, in large part, to Operation Warp Speed. of the Trump administration.
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As we begin to move out of our homes and resume our normal activities, we hope that we can take advantage of the pro-growth policies – especially tax cuts and deregulation – that have created the historically strong labor market we had. before the onset of the pandemic.
Of course, that will require a Trump victory in November.
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