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Comment by taiwanboy | Hacker News Reader

This is to help an otherwise very healthy US economy (low unemployment rate, solid gdp growth, income increases) from being taken down by an one time external, expiring event and panic that flows from it.

What is the point not supporting crucial companies in the stock market? Are you really better off if target or chevron or Hilton goes under? And tons of people have no jobs and there no access to staples?

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Unfortunately the US economy isn't very healthy - it's over-leveraged on debt and has been artificially propped up by cash injections into the market. In actuality this recession may be caused by corvid-19 but it was ready to go at the first serious economic hiccup.

I think if anything, the Fed was probably overjoyed about COVID-19; they were just waiting for an excuse to do a massive cash injection without sparking massive backlash and protests.

The new rules against gathering in large crowds are an added bonus; the Fed is not only excused, they are legally protected from any possible backlash.

I've seen this argument by investors, but what's going to change?

The virus isn't going to magically get better overnight one day. It doesn't expire. This is either going to be EXTREMELY bad in the short run or very bad over a long period of time. Either way, the economy is either going to be hurt very badly all at once or slowly deteriorate as countries have to stay quarantined. (Something that the US may have to do soon.)

Perhaps a bit too dire -- much work, and play, can be redirected for lower proximity, as has already begun. We'll be seeing a lot of tennis and golf on TV this summer, I would wager.

Ruinous nevertheless for elective healthcare, health clubs, barbers, and sit-down restaurants.

GDP has been barely above CPI while asset prices have skyrocketed. Incomes have not skyrocketed. If asset prices skyrocket yet income does not, that money has to come from somewhere. It comes from debt.

It begs the question of how healthy is the economy if a one time external, expiring event can take it down.

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