The coronavirus pandemic has had an effect on numerous facets of society. This crisis has even led to some wondering whether the United States could be headed for the next economic depression. However, others have wondered whether a recession could be looming. But, what exactly is the difference between economic depression and recession?
According to CNET, the country is currently in an economic downturn because of this health crisis. It’s unclear what exactly could happen next in reference to the economy, but there is already chatter about whether the United States could be headed for a recession or an economic depression. CNET reported that a recession is described as occurring when the economy shrinks for at least two fiscal quarters in a row (or six months), with it being determined by the gross domestic product or GDP. In comparison to a recession, a depression is more uncommon over the course of America’s history.
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Over the last 166 years, there has only been one depression (in the 1930s) and 33 recessions. CNET described an economic depression as two or more recessions occurring with no period of economic recovery in between. Given this information, there won’t be a clear answer as to whether the country is in a recession (and could then be on course for a depression) until six months have passed. As you’re likely aware, the government is trying to avoid a possible recession with its $2 trillion stimulus package. The package entails that most American taxpayers will receive $1200 and that a loan program would be enacted for businesses so that they can pay their employees.
As to how any possible, major downturns in the economy can be avoided, CNET suggested that the obvious solution is to either develop a vaccine or proper treatment against the coronavirus. Possible vaccines for the illness are reportedly already in the works. Recently, Bill Gates announced that he was donating billions in order to help speed along the production of seven possible coronavirus vaccines.
“The ultimate solution, the only thing that really lets us go back completely to normal and feel good about sitting in a stadium with lots of other people, is to create a vaccine,” Gates said on the Daily Show with Trevor Noah, which is currently being produced remotely. “And not just take care of country, but take that vaccine out to the global population so that we have vast immunity and this thing, no matter what, isn’t going to spread in large numbers.”
