In a piece published at The Bulwark this Thursday, American Enterprise Institute economist Desmond Lachman contends that anyone expecting a fast economic recovery from coronavirus hasn't been paying attention to the "rapidly deteriorating global economic and financial market outlook."
"In particular, they are choosing to ignore the toxic combination of a record-high global debt-to-GDP ratio and the deepest worldwide economic recession in the post-war period," Lachman writes. "The resulting risks include a vicious return of the European sovereign debt crisis, the abrupt shift of the Chinese economy to a lower long-run growth path, and a wave of debt defaults in emerging markets."
Lachman warns that if any of these risks were to materialize, it would mean strong headwinds against any U.S. recovery from a coronavirus-induced recession.
As government leaders mull over the potential reopening of the U.S. economy to slow the damage, they should realize there's no miracle bounce-back in the works. "Even if the virus disappeared tomorrow, the world economy and global financial markets will still be stalked by structural risks," Lachman writes.
Read his full op-ed at The Bulwark.