with interest There’s no way to sugarcoat the devastating numbers that came out this past week. As the United States surpassed China in the number of confirmed coronavirus cases, record-high jobless numbers brought the economic toll of the pandemic into sharp focus. Congress rushed to push through a rescue bill. But will it be enough?
Get ready for the biggest stimulus bill in United States history, which was signed into law on Friday. The $2 trillion package will inject the ailing economy with cash, saving jobs and bailing out companies large and small. But it also redraws the boundaries between government and private industry by putting thousands of businesses and millions of workers on federally funded life support. These vast interventions are far broader in scope (and cost) than any stimulus measures taken during the 2008 financial crisis — and that’s not an accident.
Lawmakers are wary of repeating the mistakes they made with those bailouts, which have long been criticized for favoring big banks and businesses over the needs of individual workers. More than three million people filed for unemployment benefits in the United States the week of March 15, setting a grim record as the most ever in a one-week period. The jobs report for the month of March, to be released on Friday, is expected to show an even bleaker picture. And beyond that, even the most optimistic forecasters predict that millions more will be out of work, unable to pay their bills.
Some economists say the decline in gross domestic product this year could be comparable to the worst years of the Great Depression. Nobody knows what the recovery will look like yet, but one thing is certain: Things will get more dire before they improve. No, it’s not your imagination: The pandemic is slowing down the internet. Now that we’re all stuck at home, holding meetings on Zoom, doing virtual happy hours, watching Netflix and poking around online to distract ourselves, broadband networks are buckling under the sudden surge in traffic.
Median download speeds have dropped 24 percent in New York, and they’re down 4. 9 percent across the country. To ease stress on internet infrastructure, YouTube has said it will lower the definition of its videos worldwide, while other tech companies have pushed back new streaming services and product releases.
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“Tips for impatient consumers: Watch videos on standard definition instead of high, and make sure to install software updates.”
A hallmark of the new stimulus bill is that most Americans will get cash payouts deposited straight into their bank accounts within the next three weeks, a historic move by the federal government. (If the Internal Revenue Service doesn’t have your banking information, you’ll have to wait a little longer for a check to arrive in the mail. ) So how much are we talking? If you’re a single adult with an adjusted gross income of less than $75,000 a year, you’ll be eligible to receive $1,200.
Married couples who make less than $150,000 a year can receive $2,400. And any of the above can tack on $500 for every dependent child. Those who make more than $75,000 (or couples who make more than $150,000) will get less, and those who make more than $99,000 a year (or $198,000, for a couple) won’t get anything. Contradicting health officials, President Trump said early last week that he hoped Americans would go back to work around Easter, adding that the economic damage of the coronavirus should not be worse than the disease itself.
But medical professionals have cautioned that prematurely resuming business as usual would be disastrous. Jerome Powell, the Federal Reserve chair, sided with science, reiterating — in case it was up for debate — that the deadly virus was a bigger enemy than a recession. “The first order of business will be to get the spread of the virus under control, and then to resume economic activity,” he said. You thought gas was cheap now?
Just wait until later this week, when the current OPEC deal to curb oil production runs out on April 1, opening the floodgates. Negotiations among the major oil-producing countries fell apart after the two biggest players, Saudi Arabia and Russia, failed to agree on terms. This is good news, theoretically, for your next trip to the gas station — whenever that day may come — but not great for stock markets, which plunged after efforts to renew the deal collapsed two weeks ago. Analysts predict that oil prices will remain unusually low for months, especially as the coronavirus continues to hurt demand.
Three companies that sold unauthorized coronavirus testing kits are now being questioned by Congress, and their kits have been pulled from the market. Homebound Americans are sewing thousands of face masks for hospitals that are dangerously low on protective equipment for their staff (the homemade versions are no substitute for medical-grade gear, but they’re better than the alternative, which is nothing at all). And Boris Johnson, the prime minister of Britain and architect of its Brexit deal, has tested positive for the virus. Was this newsletter forwarded to you?
We are holding a conference call for DealBook readers tomorrow, April 2, at 11 a.m. Eastern. We will go behind the scenes of the Trump administration’s response...
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