On the Post-Pandemic Horizon, Could That Be an Economic Boom? – The New York Times

In recent decades, however, booms have become less common. Growth never took off after the mild recession that hit in 2001, and while the unemployment rate hit a half-century low after the last recession, it took a decade to get there.

There are reasons to think this recovery could be different. For one thing, the economy was fundamentally healthy when the recession began. There was no housing bubble; household debt was low; banks werent sitting on a tower of dubious loans that could collapse at any moment. That means there is no reason, at least in theory, that the economy cant pick up more or less where it left off.

Policymakers have also responded much more aggressively to this crisis than to past ones. The Fed moved quickly to prevent the pandemic from setting off a financial crisis. Congress spent trillions of dollars to make sure unemployed workers could keep their homes and feed their families, and to help small businesses.

Those efforts were far from a total success. The unemployment system buckled under the crush of applicants, and millions had to wait weeks or months to get benefits, if they got them at all. Government aid was inadequate, or came too late, to save thousands of businesses. State and local governments have slashed jobs. Hunger rates have risen.

But government aid appears to have been largely effective at preventing deep structural damage that could prevent a strong rebound. There has been no wave of foreclosures or corporate bankruptcies. Rates of entrepreneurship have soared, signaling that Americans are optimistic and have access to the capital necessary to act on that optimism.

Even if there is a strong rebound, however, economists warn that not everyone will benefit.

Kara Gray and her husband, Christopher DeSure, spent years building their small Ohio construction company into a successful business. Then the pandemic shut them down, and, having a daughter at home with a compromised immune system, they havent felt comfortable returning to in-person work.

With the housing market strong, Ms. Gray is confident they will be able to get back to work once the pandemic is over. But she worries they wont be able to take full advantage of the boom. She and her husband were forced to spend the money they had set aside to buy a house, and have fallen behind on bills and run up credit card debt. That could make it hard for them to qualify for a mortgage or for a business loan to expand their company.

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On the Post-Pandemic Horizon, Could That Be an Economic Boom? - The New York Times