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How bad can the economy get? Could this be another great Depression?

The breadlines that symbolized the worst of the Great Depression have been replaced in recent months with often desperate new lines of suddenly unemployed people — in cars — waiting hours to obtain donated food for the first time in their lives, unable to pay rent or their mortgage and living in a shared state of worry that Americans have not felt for close to a century. The fallout from the COVID-19 outbreak is being compared to the most severe financial crisis in U.S. history because of the unprecedented shock to the job market and consumer spending. But will this turn into a depression? And how will we know if we’ve tipped from a recession into a depression? Risa Kumazawa, associate professor of economics at Duquesne University, is convinced the answer to the first question is yes. “Since the beginning of the coronavirus, I have continually forecasted a depression because this is a health threat that directly impacts the labor market,” she said. There is general agreement that the U.S. economy is already in recession, defined as a period when the nation’s gross domestic product contracts for at least two quarters, according to online financial site Investopedia. The Great […]

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