If consumers don’t spend, the economy grinds to a halt. This makes any recovery plan unusually tricky because most people have been told to stay home, writes columnist Davidlaz.
, with a look today at the central role consumers play in getting us through the coronavirus pandemic.A look back, and ahead, at the latest California business news.As political leaders scramble to cushion the economic blow of the coronavirus outbreak, with measures ranging from sending everyone a check to
, the Achilles heel of all these plans is the fact that consumer spending accounts for about two-thirds of total U.S. economic activity.This makes any recovery plan unusually tricky because most people have been, and many businesses have closed their doors or cut back service until the outbreak subsides.
The risk from a policy-making perspective is that no matter how cash is funneled to consumers, they may either stash it under their mattresses or have nowhere to spend it. That, in turn, would make it even harder for many businesses to stay afloat, which would lead to further layoffs and, well, nothing good., the L.A. Times urged people to keep money circulating as best they can.
“Continue to pay your house cleaner, dog walker, personal trainer and the rest of the people whose services make your life a little easier, even if you don’t use them for a few weeks,” it said. “Why? Because many of these folks are self-employed, and they lack the support systems that others of us may have. If they don’t work, they don’t get paid. But they still have to pay the bills.”Some other consumer-related coronavirus tidbits to keep in mind:.
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