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the United States panics over its plummeting economy

Wall Street, New York, March 23.
Wall Street, New York, March 23. ANGELA WEISS / AFP

The tweet was written in capital letters, a reflection of Donald Trump’s anxiety over the coronavirus epidemic. “We cannot let the remedy get worse than the disease. At the end of the fortnight [de semi-confinement], we will have a discussion on the direction we want to take “, lamented Donald Trump on the night of Sunday, March 22 to Monday, March 23.

Management was explained the next day by Larry Kudlow, Donald Trump’s economic advisor on Fox News: “We cannot shut down the economy. The economic cost is too heavy for individuals “, said Kudlow, explaining that “Difficult compromises”. “You have to wonder if containment does more harm than good”added Mr. Kudlow.

“America will once again be open for business soon”added the president at a White House press conference. “We are not going to let this turn into a long-term financial problem”, he added.

Now is not the time to break down health barriers to the detriment of the health of Americans, while a study by Imperial College London suggests 2.2 million American deaths if nothing is done. But the reflection reflects the economic panic that has gripped the United States. The economy is falling like a stone.

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Alarmist simulations

The American case is seen as the logical continuation of the pandemic, after Asia and Europe. In reality, it is the heart of the world’s first economy which threatens to stop, when the country does not have the European social safety net. The simulations are alarmist: Goldman Sachs and Bank of America predict a recession equivalent to a quarter of gross domestic product in the second quarter, an average estimate between that of JP Morgan (-14%) and Morgan Stanley (-30%).

Unemployment could soar to levels never seen since the Great Depression of the 1930s. Steve Mnuchin, Secretary of the Treasury, spoke of the figure of 20% if nothing is done, before being denied by Donald Trump. The chairman of the Saint Louis Federal Reserve, James Bullard, does not rule out a 30% surge, which would mean that 50 million unemployed Americans out of a working population of 164 million. The number of unemployment benefit claims will be known on Thursday, but it looks abysmal, probably around 2 million, according to the estimate of Goldman Sachs. With their jobs, many workers also lose their health insurance.

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