CBO projects 38% drop in GDP, $2.1 trillion increase in the deficit

[Yo_Mama_Been_Loggin]

The Congressional Budget Office released its own bleak outlook Tuesday on economic growth, unemployment and the federal budget, predicting job gains later this year but an overall climate that will remain subdued through 2021.

In its latest projections, the CBO sees GDP capsizing 38% on an annualized basis in the second quarter with the 26 million more unemployed Americans than there were at the end of 2019.

The forecasts are roughly in line with Wall Street economists and slightly less dour than the most recent tracking number from the Atlanta Federal Reserve, which sees GDP falling about 42% in the April-to-June period.

If the collective outlook is anything close to accurate, it will represent the worst drop for a U.S. economy that was brought to a halt due to efforts to stem the coronavirus pandemic.

https://www.msn.com/en-us/money/markets/cbo-projects-38percent-drop-in-gdp-dollar21-trillion-increase-in-the-deficit/ar-BB14jIWp?li=BBnb7Kz

[keithbvadu2]

1. MAGAts, don't be afraid to brag 'the Trump economy'.

[SWBTATTReg]

2. Too bad they can't put a value on human life, eh? Obviously human life (90,000+ and count...

ing) is at least equal to 38% of the GDP. And this is at approximately 90,000+ deaths.

So the rest of us, staying at home, protecting all of our lives, is worth 38% of GDP, so in effect, why not add 'our value' to the GDP too? The GOP thugs obviously got money in the brain and that's all they measure obviously.

[coti]

3. That's reaaaaally bad.

Incredible the stock market isn't plummeting- shows its just people playing games with fake money.

[unblock]

5. the dow (not the best index, but still) is 18% off its high. sp500 is 14% off its high.

this is a remarkably unusual contraction, one of the peculiar aspects is how some businesses immediately shut down, others have been able to stumble along, and others have thrived in this weird environment (amazon, e.g.).

one of the confusing points is that the hardest hit parts of the economy are not public companies but small, private businesses like local restaurants and nail salons. things that cater to big crowds and a lot of close contact with consumers tend to be private businesses, which are not directly reflected in the stock market, as these are only public companies.

of course, public companies rely on these smaller companies and their employees and consumers to buy their goods, so it will all have an impact, but much of that won't happen until later on and how severe that is depends on how long the shutdown or restrained economy lingers on.

also, the government rushed to pour a ton of money into the economy, which is something they don't normally manage to do until the recession is nearly over. of course, much of it is going to the wrong places, i mean, how stupid was it to put donnie in charge of doling out 2 trillion dollars, but one way or another it's pumping up the economy and markets.


yes, some of the stock price is being held up due to the pumping in of money, the lowering of interest rates back to zero, other fed actions.

but a lot of it is not unreasonable forecasting that the economy is not going to be as locked down as it is now for much longer. there will be a cycle of scattered local lockdowns and reopenings for a long time, but many bigger businesses can continue to make profits in that environment. especially if the government continues to throw money at the problem.

[unblock]

4. just for reference, in 1932 the economy contracted 12.9% over the course of the year

here we're talking about a contraction of around 10% give or take *in a single quarter*.

[Igel]

6. Yeah, but that one was driven by economics.

Good, bad, or indifferent, it was a lot of individuals making economic decisions about the stock market and financing.

This one isn't. It was a few individuals (one the one hand) using government power to shut down portions of the economy and (on the other) fear of imminent death.

I mean, even today today I read somebody saying that if COVID comes to his (her?) town it would "wipe them out". Even if the entire townsperson was over 80 years old and were infected it wouldn't have anywhere near a 50% death rate. Still belief works that way.