“The Economy is halfway back from the pandemic to where we want to be,” speaker Fred Bergsten opened the discussion on October 27th.
Bergsten started the discussion by highlighting the four main takeaways. The first is that the economy is about halfway back from the pandemic. The second, for our economy is that Health policy is really economic policy. Third, the senate election may be as important as the presidential election, especially for economic policy. Lastly, the recovery program to bring the economy back even halfway from the pandemic will leave some long-term costs.
“The pandemic actually produced a huge paradox for the US economy,” Bergsten said as he painted the picture of where we have come and where we are.
The 35% drop in GDP in the second quarter was the fastest in history. The paradox of it all is the downturn produced the largest positive shock to the economy ever, through the policy response, fiscal response, plus the Federal Reserve’s further expansion of monetary policy. Bergsten explained how the stimulus checks, the increase of unemployment insurance, and the payment protection program had increased the disposable personal income by about 12% in the second quarter.
The economic outcome will depend on three key variables: The response, Federal Reserve as a whole, and the fiscal policy. Bergsten then brought up the election impact of our economic outcome. He highlights the candidates’ main political differences as macroeconomic policies, trade policy, and tax policy.
Hampton Roads is in a season of recovery, and as Bergsten highlighted, our economy is halfway back from the pandemic. And the pandemic will leave some long term costs for the economy.
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