The Only Way To Save The Economy & Prevent A Depression

The Only Way To Save The Economy & Prevent A Depression

Posted On May 14, 2020 12:59 pm

America is facing a ticking clock to avert the first depression in over 80 years. There is a single huge threat facing us and three things we must do to keep this recession from becoming a depression.

In part one of this series, I explained Moody’s definition of Depression as “12 consecutive months of 10+% unemployment”.

While that’s a bit of a narrow definition as far as most economists are concerned, it certainly fits a definition most on main street might agree with.

And without question, it’s something we want to avoid if at all possible.

The 2 Ways This Recession Might Become a Depression

Mark Zandi, Moody’s chief economist, just told CNBC that there is a single big catalyst, that’s actually likely to happen this year, that could push the US into a depression in 2020 unless we act aggressively as a nation to prevent it.

Second Wave of the Virus Could Trigger a Depression

If we get a second wave, it will be a depression…We may not shut down again, but certainly, it will scare people and spook people and weigh on the economy.” – Mark Zandi, Moody’s Chief Economist

While some might criticize Mr. Zandi for scaremongering, the most recent data say that he is likely correct.

Not only has Anthony Fauci and other leading pandemic experts said that a second wave is likely, even “inevitable” this fall/winter, but it’s also true that avoiding more lockdowns might do little to avert an even worse economic contraction.

Some people blame state governors for ordering lockdowns that caused so many businesses to close. But cell phone data indicates that in every single state, Americans stayed home in massive numbers beginning on March 12th and 13th, long before most states began ordering people to do so.

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Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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