The U.S. entered the coronavirus recession with a few structural advantages. Its success may not last for long.
Here is a remarkable, underappreciated fact: The U.S. economy has performed far better than that of many of the country’s peers during this horrible year. The International Monetary Fund expects the U.S. economy to contract by 4.4 percent in 2020, versus 5.3 percent in Japan, 6 percent in Germany, 7.1 percent in Canada, and nearly 10 percent in both the United Kingdom and France.
This fact is not a result of the United States managing its public-health response better than those countries, allowing it to reopen from lockdown sooner and for consumption to roar back. Indeed, many of those peer nations have had significantly better outcomes, as measured by COVID-19 caseloads, hospitalizations, and death rates. Nor is it a result of the U.S. preserving more jobs. The unemployment rate here is far higher here than it is in Japan, Germany, or the U.K.
America owes its macroeconomic good fortune to Washington muscling through a giant and successful stimulus in the spring—a policy victory that Congress and the outgoing Trump administration are doing their best to cram into the jaws of defeat.