Most forecasters still predicting a rapid economic bounceback in the 2nd half. But reasons to be skeptical, including some this (very good) article doesn't mention 1/ nytimes.com/2020/04/01/bus…
People are focusing on the damage to balance sheets. Indeed, as the pandemic subsides many households/businesses will find themselves low on assets and high on debt, inhibiting spending 2/
But not enough talk, I think, about the fiscal side. First, the checks sent out by the CARES Act are one-time only, and expanded unemployment benefits expire after four months 3/
Second, state and local governments are under severe financial strain. They'll have to keep spending during the medical crisis, but will have to raise taxes and/or slash spending to make up that later unless they get a lot more federal aid 4/
So we're going to be experiencing a major fiscal contraction just as the direct hit from the coronavirus diminishes. This could really slow the recovery 5/
