In short, Covid-19 triggered an economic tsunami, but so far the US federal government has held it at bay:
* Since March, the Federal Reserve has created "out of thin air" approximately $3 trillion dollars in new monetary assets, to support asset prices and prevent another financial crisis. This figure is about 3x greater than the $1 trillion of monetary assets created in all of 2008 and 2009, during the worst of the financial crisis. Source: https://fred.stlouisfed.org/series/WALCL
* In addition to the above monetary intervention, the federal government launched a ~$3 trillion rescue package at the beginning of the pandemic (including all those PPP loans that won't be repaid, all that spending on special unemployment benefits, all sorts of support for states, businesses, etc.), and now the debate is whether to spend an additional ~$1+ trillion (the last figure floated by the US treasury) or an additional ~$3.4 trillion (as proposed by congress). Source: https://www.reuters.com/article/health-coronavirus-usa-congr...
The federal government is supporting the economy in an unprecedented manner to an unprecedented degree, to prevent it from collapsing until the virus is fully under control. All economic statistics reflect this unprecedented massive economic support. They do not reflect the "true underlying state" of the economy. There's nothing counterintuitive about that.
> The federal government is supporting the economy in an unprecedented manner to an unprecedented degree, to prevent it from collapsing until the virus is fully under control. All economic statistics reflect this unprecedented massive economic support.
And while this is true to an extent, it's also important to note that the government is supporting some parts of the economy (corporations, the stock market) significantly more than others (workers, the unemployed), and with the failure of the Republicans to agree to a new stimulus bill that wasn't 99.9% "bail out the wealthy and grant immunity to corporations that force their employees to work without adequate safety measures", that latter part is going to start showing in a big way, real soon.
Not so. The support for unemployed workers has been extraordinarily generous - $600 a week. Household income has not fallen because of the unprecedented state UI support.
Anecdote: in the SF bay area in the last two weeks, I've randomly overheard two business owners talk about how they have lots of work but can't hire back any of their workers. One was a roofer, the other the manager of a hair salon who explicitly said that their staff say why would make $1000 / month less if they came back to work than if they stay at home not working. That suggests that as soon as the financial support falls to a more normal level, the unemployment level may drop significantly.
I apologize for the lack of clarity in my post: I meant that the lion's share of the money the government spent went to corporations.
If the government had paid every American some reasonable sum—something approaching the median cost of living, perhaps?—for the duration of the pandemic, it would have drastically reduced the amount that would have been necessary to support businesses, as expenses for all but essential businesses would have been cut down to infrastructure maintenance.
Also, my main point regarding support for regular workers/unemployed is that now it's ending and things are going to get worse.
* Since March, the Federal Reserve has created "out of thin air" approximately $3 trillion dollars in new monetary assets, to support asset prices and prevent another financial crisis. This figure is about 3x greater than the $1 trillion of monetary assets created in all of 2008 and 2009, during the worst of the financial crisis. Source: https://fred.stlouisfed.org/series/WALCL
* In addition to the above monetary intervention, the federal government launched a ~$3 trillion rescue package at the beginning of the pandemic (including all those PPP loans that won't be repaid, all that spending on special unemployment benefits, all sorts of support for states, businesses, etc.), and now the debate is whether to spend an additional ~$1+ trillion (the last figure floated by the US treasury) or an additional ~$3.4 trillion (as proposed by congress). Source: https://www.reuters.com/article/health-coronavirus-usa-congr...
The federal government is supporting the economy in an unprecedented manner to an unprecedented degree, to prevent it from collapsing until the virus is fully under control. All economic statistics reflect this unprecedented massive economic support. They do not reflect the "true underlying state" of the economy. There's nothing counterintuitive about that.