Nowhere near the magnitude of COVID, especially money put directly into the pockets of average citizens. Stimulus checks, unemployment extension and top offs, student loan forbearance, rental/mortgage assistance. Then we also had programs like PPP. This is not even comparable to what was offered during the GFC. And that was kind of my point. It's not going to be politically viable to not offer a similar level of assistance when the next crisis hits since there is now precedent for it.But weren’t extreme interventions and measures also taken during the GFC in 2008-09’? And it was the worst bear market since the Great Depression. I do not think it’s wise to simply count on safety nets like that.
Well that's pretty much the gist of it, imo. I just think of the massive stimulus measures that were undertaken during COVID vs the GFC. Plus how aggressive and "creative" monetary policy has gotten as well in light of potential economic crisis.
If a major recession hits, it just doesn't seem politically viable for politicians to not offer similar levels of stimulus and welfare spending as they did during COVID. And of course the Fed is going to be taking extraordinary measures as well.
Like you said, I am not commenting on whether all this is right or wrong policy. But I think this will be the policy going forward if a recession hits or there is a sign of some economic calamity. I think it's a new paradigm.
Also didn't mention just how reliant the overall economy is on stock market gains. The country's largest (and world's 5th largest iirc) economy in California heavily relies on tax revenue from capital gains. As do a lot of other states and to some extent the US Treasury. Pension funds. University endowments. All of these institutions got into massive trouble during the GFC and it took a long time to dig out. Again, I don't think policymakers want to go through that again if they can avoid it.
Statistics: Posted by Lynx310650 — Thu Jan 23, 2025 8:09 pm — Replies 25 — Views 1410