Fed’s Bullard: Coronavirus Shutdown is Not a Recession but an Investment in Survival

The comments below are an edited and abridged synopsis of an article by Reuters

In normal times, massive unemployment and a collapse in economic output would be tragic.

Fed’s Bullard: Coronavirus Shutdown is Not a Recession but an Investment in Survival | BullionBuzz
School shutdown symbol picture,medical gloves and black board, covid-19,corona virus

This time, as the coronavirus cloisters millions and shuts down economies, it should be saluted as an investment in public health that lays the groundwork for a rapid rebound.

That is the view of St. Louis Federal Reserve President James Bullard, who argues that a potential $2.5 trillion hit coming to the economy is both necessary and manageable if officials move fast and keep it simple. Bullard argues that the shutdown measures being rolled out are essential to shortening the course of the pandemic.

They must also be coupled with massive federal government support to sustain the population through its coming isolation and prime the economy to pick up where it left off.

Up for discussion: Bullard argues that a potential $2.5 trillion hit coming to the US economy is both necessary and manageable if officials move fast and keep it simple; he says the shutdown measures now being rolled out are essential to shortening the course of the pandemic; these measures must be coupled with massive federal government support to sustain the population through its coming isolation and prime the economy to pick up where it left off.

Bullard’s ballpark estimate is that unemployment could hit 30%, higher than in the Great Depression and three times more than the 2007-2009 recession.

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