Coronavirus causes economy crash

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Photo courtesy of Wikimediacommons.org

A display of some of the stock market numbers from 2016.

Alex Martinez, News Editor

The current global pandemic known as COVID-19, or more colloquially as the coronavirus, has already proven to be a major threat to the well-being of people across the world. As of March 16, there are 168,019 cases and 6,610 deaths coming from the 148 countries that have confirmed cases. As a result, schools worldwide have been closed, curfews have been established, grocery stores have been ransacked, etc. Among the global chaos however, countries like the United States will potentially suffer severe detriments as a result of the economic uncertainty.

It is too early to determine the true effects that the coronavirus pandemic has on the US economy, but it is reasonable to predict that the stock market will become increasingly volatile. In the past month, the Dow Jones Industrial Average has shown an alarming downward trend, consistent with country-wide changes such as the closing of schools, the cancellation of events such as music festivals and the Houston Rodeo and the limiting of purchasable items at grocery stores such as water and toilet paper. Global crises like this almost always bring economic issues, a pandemic of this severity is entirely capable of bringing America’s once booming economy to a grinding halt in the matter of weeks. Controlled, decisive action must be taken by both government officials and their constituents to ensure that intensive treatment is available to those sick and that every action is taken to prevent the future spreading of the virus.

As of March 16, the mayor of Los Angeles, California declared an official prohibition on residents for leaving their homes for any reason other than to visit a doctor or to buy medicine or groceries until April 7. Aside from grocery stores, pharmacies and clinics, every other business is forced to shut down. In most every other place in the US, a similar situation is evident. People are prioritizing basic food and hygiene items whilst minimalizing every possible chance of coming into contact with potentially sick people. Customers are scarce, essentially nonexistent for businesses that provide anything other than food, water, toilet paper, hand sanitizer and breathing masks. In this time of uncertainty and chaos, consumer spending is, for the most part, very specific and is only to address their own health needs. Mass concentrated spending typically occurs in very specific, generally fearful circumstances and is almost guaranteed to lead to shortages of items. This is evident in any local grocery store where no toilet paper, hand sanitizer and a few select food items are anywhere to be found.

Since the ramifications from the coronavirus pandemic are likely to plague the US for a considerable amount of time, it is hard to pinpoint the ways that it will affect the country and American lives. Economists and historians can do their best to anticipate how, but ultimately, no one is truly sure how something as severe and intricate as this will shape the future of the country.

From a purely superficial standpoint, the ongoing pandemic is anticipated to continue to slow the economy, as any pandemic is expected to. Conditions brought on by a disaster like this are expected to slow the exchange of goods and services across the country. Reduced social contact and closed workplaces greatly reduce productivity as a whole, which is indicative of a reduced economy. The state of emergency declared in Washington, the forced isolation of San Francisco and the postponing of the Georgia, Kentucky and Louisiana primaries all suggest that a slow state of recovery is necessary to minimize the negative effects of the pandemic.

This slower, sluggish America is adapting to the rapidly changing conditions of the rest of the world. This is reflected upon America’s economy, in which productivity is minimal. As a result, the stagnant economy is likely to remain as such until the conditions of this pandemic improve and allow workplaces across the country to return to normal functions.