By Chathushka Perera
New York, USA (CWBN)_ Since the peak GDP growth of 3.1% under the Obama administration, recorded in 2015, the Trump administration reached a similar peak in 2018 at 3% which dropped to 2.2% in 2019, but when the Covid-19 pandemic broke out in the US in January 2020, market went into a free fall. The current GDP is facing a regression of 4.3%.
It is the highest drop recorded in the last 75 years.
With over 9 million cases and 232,101 (4%) deaths recorded, pandemic reaching for the mantle of the Spanish Flu of 1918, it is unclear how things would go in 2021, account the many disruptive social factors influencing the local economy. These factors are not limited to unemployment, but, include business bankruptcy (minor scale business are among the worst affected) and temporary shut downs, social unrest, loss of skilled personnel, influx of goods and services within the country, declining household spending, decline of mental health and drug use.
Perhaps the most defining factor in everything is the White House. Although President Donald Trump managed to retain the confidence of the hard-line conservative groups, the majority US majority and perhaps the international community remain unimpressed and uninspired by the government’s leadership, especially in regard to its handling of the early days of the pandemic when it could have been contained.
In fact, Secretary of Health and Human Services, Alex Azar, was forced to bypass the White House and request 4 billion USD from Congress to handle the pandemic, sparking outrage. Congress supported Azar’s request with 8 billion USD.
As the economy remains at risk of coming to a complete stop, the fiscal stimulus bill that ought to have been passed by the government is nowhere to be seen, after the Democratic body rejected an earlier submission based trivial scope of the response. Discussion to produce a bill have been moving forward but expectations public remain modest at best.
The Guardian (US) reported that since World War II the average economic growth maintained by Democrat governments stands at 4.3% whereas as that of the Republican sect has managed just about 2.3%. In terms of the Obama administration, the growth rate was recorded at 2.5% annually whereas as Trump held it at 2.6%, despite extreme tax cuts to large cooperation in an apparent bid to boost employment rates. Nonetheless the government managed 6.6 million jobs, falling short of the Obama administrations record 8.1 million in the last three year of his term.
Moreover, it must be accounted that the Obama administration was handed over an economy in recession in 2009 and later was forced to face the H1N1 pandemic immediately after. According reports sourced from the International Monetary Fund (IMF), the government was able to handle a relatively stable economy until 2016 with a budget deficit of 1.6 trillion, as opposed to Trump’s 2.5 trillion in his first three years.
These factors have many hopeful a Democrat victory in the upcoming election and its 2.1 trillion USD green economy stimulus and infrastructural investments, and heavy cooperate taxes.
