Investors, policymakers, businesses and the general public are increasingly concerned the coronavirus’ rapid spread will lead to a recession. While this outcome is hard for economists like me to predict, we do know one thing: The U.S. is not prepared to fight a deep recession.
Policymakers basically have two methods for reversing a downturn: monetary stimulus, primarily through reduced borrowing costs; and fiscal stimulus, when the government spends more or cuts taxes.
Unfortunately, the U.S. currently has dim prospects for success with either option. Continue reading.