Here are the durations of every US recession since World War II:
The pandemic recession of 2020 was only two months long. What accounts for its astounding brevity?
The most likely answer is Congress. According to the NBER recession dating folks, the recession started in February. Almost instantly Congress made it clear that it took the recession seriously by passing $2.4 trillion in rescue funding that included both immediate relief (checks) as well as longer term help (expanded UI benefits). By April the recession was over.
This has never happened before. There have been past stimulus bills, to be sure, but never of the speed and magnitude that we showed last year. Nothing even close.
So this is a fascinating macroeconomic experiment. Was there something special about the coronavirus recession? Or does our response show that we could have avoided past recessions by passing huge, immediate spending bills? Economists will be arguing about this for decades.
I'll bet the wealthy class does not consider this a good thing, since they do okay in recessions anyway. Congress providing relief to the larger population translates (in their minds) to free money for Those People.
Kevin writes:
"The pandemic recession of 2020 was only two months long."
How can a recession last only two months? The traditional definition of a recession is two consecutive quarters of negative GDP growth. The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
Shh. Narrative…
The Republicans went along to help Trump. The Democrats went along to help people.
When a Democrat is in office, the Republicans won't so a thing.
Yes, with Biden in the White House, Republicans are digging in their heels to obstruct anything that may prove useful to working people and poor people.
& still, Brad Raffensperger stabbed El Jefe in the back.
Please note that Mr Raffensperger has been stripped of his power to do that again in 2024.
That’s why the longest recessions occurred under Reagan, W. Bush, and Nixon.
A recession is just an opportunity for the cash-rich to foreclose on the middle class at core-sale prices.
The response of Congress was encouraging, but it's not a test of response to a normal recession, caused by financial collapse. In such cases confidence is broken and nobody wants to spend or invest. This time, after a short and not very large panic on Wall Street, confidence quickly returned. This happened before the fiscal stimulus was passed.
Will Congress respond the same way in the next more normal recession? Probably not if a Democrat is President and Republicans hold either house of Congress.
ROFL. The guy that just lost their job in that normal recession doesn't want to spend. You're funny.
This has certainly happened before. The economy entered a recession in March 2001. In June of 2001 Pres. Bush signed a bill that rebated 2000 taxes ($300 single, $600 married, etc.) and cut tax rates. This reversed the budget surpluses of FYs 1998-2000 and returned the budget to deficit. The recession ended in November 2001, if memory serves.
Thanks, bin Laden!
> There have been past stimulus bills, to be sure, but never of the speed and magnitude that we showed last year. Nothing even close.
The best description of the lockdown and social distancig measures imposed (in the absence of vaccines) on the economy was Paul Krugman's explanation of an "induced coma" to avoid catastrophic damage. The rescue package was essentially intravenously administered nutrition. It wasn't a macroeconomic experiment, it was basically the best course available under the circumstances. If economists argue about this for decades, it will be because economists are a fractious bunch, not because the merits of the policy involved are really in question.
What happened to the Great Recession?? Your chart jumps from 2001 to 2020. You missed a big one....
Uh, no. There's an entry labeled "2007."
X axis is NOT chronological order
In previous writings you have called it an induced recession, one from which we would as a result snap back quickly.
> Economists will be arguing about this for decades.
Conservative fresh-water trolls will be arguing about this for decades. The salt-water economists can pretty much point out they are trolling and otherwise ignore them.