The Washington Post Reported Record Debts In The US Due To The Coronavirus Epidemic
American public debt and corporate debt in the United States this year will reach record levels due to the coronavirus epidemic in the country, according to The Washington Post.
The United States Federal budget deficit due to measures to compensate for damage from the coronavirus will grow to almost $4 trillion — twice the size of the American economy. This situation has not happened since the end of World war II.
The authors of the publication compare the situation with the great depression — a global economic crisis that began in 1929 with the collapse of American stock exchanges and lasted for ten years.
In particular, there are examples of large companies ExxonMobil and Walgreens that accumulated debts and exhausted their credit lines. To support corporations, FED has reset interest rates and added more than $2 trillion to its portfolio over the past six weeks — the same amount added in the four years after the great depression.
Businesses in the United States face a choice due to their debt burden: lay off employees or skip loan payments. According to WP, millions of American citizens have already faced the demand of banks to repay student loans and card debts.
Earlier in April, experts of the S&P Global Ratings Agency predicted a 5.3% drop in the US economy by the end of 2020 due to the COVID-19 epidemic. The Agency called the situation in the world a global recession.
The International Monetary Fund estimates that US GDP will fall by 5.9% by the end of 2020. Experts have already called the consequences of the coronavirus pandemic the worst downturn in the world economy since the great depression.
Bloomberg estimated macroeconomic losses in the next two years at $5 trillion.