Very vulnerable, the American economy is preparing to experience an earthquake with the arrival on its territory of the coronavirus. The American model, far from being infallible, could be the cause of the rapid spread of the virus, the consequences of which, both economic and social, will be terrible.
After China and then Europe, the Covid-19 will now devastate the American economy. And she is very vulnerable.
Yes, because it has no social shock absorbers. Several tens of millions of Americans have no health insurance, and unemployment insurance is rudimentary. The shutdown of the first world economy is the next shock that will hit the world and it will be of incredible violence. We are talking about 20% unemployment. Morgan Stanley Bank plans a 30% drop in growth in the second quarter. To try to cushion this shock, the Congress has just barely agreed on a bailout of 2,000 billion dollars, about 10% of the GDP of the United States. Unheard of in peacetime.
The virus also reveals flaws in the American model.
Yes, because many employees in service jobs, catering for example, have health coverage which does not encourage them to stop and see a doctor. For two reasons: a quarter of employees are not entitled to any sick leave days, so even when they are a little sick, they continue to work to keep their wages. And two: health insurance almost always includes deductibles. The first few hundred dollars of medical expenses are not reimbursed. Result, we will not consult, we continue to work and we infect everyone. This is why the virus has spread so quickly. The economic and social consequences are likely to be overwhelming.