The American economy is still grappling with the implications of COVID-19 and the lockdown-induced recession.
The Business Cycle Dating Committee at the National Bureau of Economic Research — which tracks the length of American recessions and expansions — defines a recession as the time between a “peak” and “trough” in economic activity. Last year, economic activity peaked in February before bottoming out in April — meaning that the recession of 2020 was the shortest ever recorded in American history.
Nevertheless, the federal government responded more aggressively than in any previous downturn. In March 2020, President Trump signed the $2.2 trillion CARES Act; in December 2020, he signed another $900 billion aid package. In March of this year, President Biden approved the $1.9 trillion American Rescue Plan.
Some silver linings emerged from last year’s recession. However, policymakers’ responses to the spread of COVID-19 carry massive implications for the American economy. Here are the many lessons that Americans ought to take from the 2020 recession — the good, the bad, and the ugly.