The current economic environment presents the government with very tough choices. If we open up our economy too quickly, the medical experts tell us that we risk reversing the progress we have seen in fighting the pandemic. That would be a tragedy. On the other hand, if we don’t open up the economy, there will be grave economic repercussions. It is almost like — pick your poison.
Even the government’s economic response to the crisis comes with hard choices. We have already spent or allocated trillions of dollars. And now we are considering more stimulus. No one is arguing that the help is not needed. On the other side of the coin, the government will be forced to borrow this money. Going into the markets to borrow trillions could put upward pressure on interest rates. And we don’t need higher rates right now.
Thus, there are many “rock” and “hard place” decisions to be made. And because of the severity of the pandemic, we don’t have many choices of where to turn, because there is not much room to maneuver between these rocks and hard places. And somewhere down the line, we will have to pay for all of this borrowing. That could mean higher taxes, another tough decision for the government.
Source: Origination Pro
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