One year ago in this space, I wrote about the impact of Federal Reserve policy on the economy amid the COVID-19 pandemic. I argued that because of the stimulus packages being pumped into the economy, we would circumvent a recession similar to the Great Depression or Great Recession. One may reasonably argue that a depression has been avoided.
One year later it seems appropriate to ask a different question: What happens now? The short answer is simple: Nobody knows. We don’t know what the future holds for COVID-19 variants, vaccine distribution, pent-up demand, etc.
Let’s look at our economic past and see if answers could be gleaned.
Interestingly enough, today’s government spending and economic climate have striking…