- St. Louis Fed predicts unemployment rates could be far worse than they were during the Great Depression.
- These numbers are even more severe than St. Louis Fed President’s grim prediction last week.
- Could these challenges be a test run for Universal Basic Income?
As the coronavirus pandemic continues to wreak havoc, numbers around the U.S. economy are looking more terrifying by the day. The latest gut-punch came from the St. Louis Fed economists.
They see as many as 47 million Americans becoming jobless before this is all over. To put that in perspective, the 2009 recession gave us a peak unemployment rate of 10.2 percent. The Great Depression carried a peak unemployment rate of 24.9 percent. The St. Louis Fed’s figure translates to a staggering 32.1 percent unemployment rate.
Buckle Up. The Worst is Yet to Come For the U.S. Economy
This grim outlook comes on the heels of St. Louis Fed President James Bullard’s 30% unemployment rate projection.
In a report published last week, St. Louis Fed economist Miguel Faria-e-Castro stated:
These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.
But the Feds aren’t the only ones making terrifying predictions. New York University’s Nouriel Roubini predicts a “greater depression” on the horizon. He claims that a lackluster coronavirus response by most countries will be the driving force in this collapse.
Unfortunately for the best-case scenario, the public-health response in advanced economies has fallen far short of what is needed to contain the pandemic, and the fiscal-policy package currently being debated is neither large nor rapid enough to create the conditions for a timely recovery. As such, the risk of a new Great Depression, worse than the original – a Greater Depression – is rising by the day