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Massive US economic rescue plan is only the start, experts say

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The coronavirus outbreak and resulting lockdown of billions of people threatens the global economy to the point where economists are predicting the most violent recession in recent history, perhaps even eclipsing the Great Depression.

The crash will almost certainly be accompanied by a surge in unemployment, especially in countries with weaker worker rights, such as the United States.

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Ahead of Thursday’s emergency virtual G20 meeting, here are the key concerns.

– RECESSION OR DEPRESSION? –

“The G20 economies will experience an unprecedented shock in the first half of this year and will contract in 2020 as a whole, before picking up in 2021,” economists from the rating agency Moody’s wrote on Wednesday.

Angel Gurria, head of the Organisation for Economic Co-operation and Development (OECD), told the BBC the world economy would suffer “for years”.

AFP/File / Angela WEISS, Nicholas KAMM, Johannes EISELE, Frederic J. BROWN, Mandel NGAN, Eric BARADAT, MEGAN JELINGER, Saul LOEB, Andrew CABALLERO-REYNOLDS The crash will almost certainly be accompanied by a surge in unemployment, especially in countries with weaker worker rights, such as the United States

The current crisis is likely to be more severe than the 2008 financial crisis crash because it affects the entire economy, with a collapse in supply due to the shuttering of factories and a similar crash in demand with billions of people in lockdown.

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The transport and tourism sectors have been the first to feel the pain, although some such as pharmaceuticals, health equipment, sanitary products, food and online trade have seen a boost.

The collective GDP of the G20 countries is predicted to contract 0.5 percent, according to Moody’s, with the US down 2.0 percent and the eurozone losing 2.2 percent.

China is expected to buck the trend and grow, but at a much-reduced rate of 3.3 percent, according to Moody’s.

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Most major banks believe the US has already fallen into recession, with Goldman Sachs forecasting a contraction of 3.8 percent this year and Deutsche Bank predicting the worst US slowdown since “at least World War II”.

In Europe, where the PMI business activity studies for March were the worst ever recorded, the German economy minister warned of a contraction of “at least” 5.0 percent in 2020.

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France’s economy could shrink by 1.4 percent, according to Moody’s.

Britain could fare worse, with KPMG predicting a fall of 2.6 percent, but that loss could double if the pandemic lasts until the end of the summer.

Capital Economics paints the darkest picture, warning of a possible 15 percent contraction in the second quarter, almost twice as bad as during the Great Depression of the 1930s.

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– UNEMPLOYMENT –

Unemployment rates are expected to soar, particularly in countries where levels have recently been at historic lows, such as Britain and the US.

These economies have relied heavily on the boom in jobs in the “gig economy”, such as taxi drivers and delivery workers, which offer little or no social protection.

Even employees on long contracts can be fired easily in the US, with economists predicting a dramatic increase in unemployment claims of between 1.0 and 3.0 million when data is released on Thursday, compared to 281,000 at present.

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James Bullard, president of the St Louis Federal Reserve, has predicted unprecedented unemployment rates of 30 percent, while Europe can also expect to suffer.

“We think the unemployment rate in the eurozone will surge to about 12 percent by the end of June, giving up seven years’ worth of gains in a matter of months,” said David Oxley of the London-based Capital Economics, adding they expected some rebound by the end of the year.

– INFLATION –

The effect the crisis will have on prices is the source of great uncertainty, with deflationary pressure due to a collapse in demand on the one hand and potential inflationary pressure caused by devalued currencies and possible shortages on the other.

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Inflation rates are low for the moment, and generally below central bank targets, particularly in Britain.

– DEBT –

Britain’s current national debt of 90 percent of GDP is high, but reached “nearly 260 percent after the Second World War,” Carl Emmerson of the Institute for Fiscal Studies (IFS), told AFP.

But leaders “really shouldn’t be worried” by debt and deficits for the time being with financing rates at historical lows, Jonathan Portes, professor of economics at King’s College London, told AFP.

They appear to be heeding the advice, with leaders from Washington to Berlin consigning fiscal orthodoxy to the dustbin and announcing budget-busting rescue plans for the economy.

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Democrats win another voting rights victory as absentee restrictions struck down in South Carolina

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On Monday, voting rights attorney Marc Elias reported that a federal court has blocked a restriction on absentee ballots for the upcoming South Carolina primary.

The ruling undoes a requirement that mail-in ballots be accompanied by a witness.

BREAKING: @DCCC, @TheDemocrats, and @scdp score major voting rights victory in South Carolina. Federal Court blocks witness requirement for absentee ballots in June primary.

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GOP ripped for refusing to remove Trump from office: ‘Folly of that failure becomes clearer by the day’

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Republicans seeking to keep control of the United States Senate were harshly criticized by the St. Louis Post-Dispatch for failing to remove President Donald Trump from office during impeachment.

"For four years now, as both a candidate and president, Donald Trump has repeatedly attacked America’s voting system, falsely claiming voter fraud any time it suited his needs. In a new low, last week he threatened the federal funding of two states over their reasonable moves to facilitate mail-in voting," the newspaper noted in an editorial published online on Memorial Day. "What does it say that the head of the world’s leading democracy is so intent on undermining that democracy?"

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Fox News commentator slammed for mocking Joe Biden’s decision to wear a mask

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On Monday, during his observance of Memorial Day, former Vice President Joe Biden donned a face mask in accordance with CDC guidelines — a contrast with President Donald Trump, who has frequently refused to wear a mask even in some places that require them.

But Fox News senior analyst Brit Hume went out of his way to mock how Biden looked wearing it.

This might help explain why Trump doesn’t like to wear a mask in public. Biden today. pic.twitter.com/9l1gw1ljBE

— Brit Hume (@brithume) May 25, 2020

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