I thought I’d pass along this assessment from Robert Samuelson at the Washington Post:
The CBO responded to a request by Senate Minority Leader Charles E. Schumer (D-N.Y.) to compare its latest forecast with those prepared in January. The loss was a stunning $7.9 trillion over an 11-year period, with the figures adjusted to eliminate inflation. The main causes were the coronavirus and related lockdown, which caused a surge of joblessness.
That actually sounds light to me. $8 trillion over 11 years in a $21 trillion economy is not nearly as devastating as current conditions feel. He continues:
That’s about 3 percent of cumulative loss to gross domestic product over the same period, says the CBO. There may be more to come. Employment, car sales and housing starts could all take a hit when the CBO recalculates other changes since January. In particular, it hasn’t re-estimated changes in productivity — overall efficiency, which could result in significantly faster or slower economic growth.
Economist Mark Zandi of Moody’s Analytics believes that the CBO’s forecast may be too optimistic. “I don’t think the economy will ever fully get back to the GDP growth rate [before the pandemic], which CBO expects by the end of this decade,” he said in an email. He cited many factors that could slow growth: “diminished globalization — including less trade, immigration and foreign investment — and a much more precarious [budget] situation.”
The one word of advice that I can give is that we need to choose more wisely. Security demands that we bring supply chains closer to home. While that alone won’t satisfy the proponents of a “Green New Deal”, it would certainly be better from an environmental perspective than the status quo ante. And I think it would be much better for all parties to be more tightly interconnected with Canada, Mexico, and other Western Hemisphere countries than our present dependence on China.