Former Fed chair Ben Bernanke says the economic hit from the coronavirus is more similar to 'a natural disaster' than the Great Depression
- Ben Bernanke said the economic crisis facing America as a result of the coronavirus pandemic is more comparable to "a major snowstorm or a natural disaster" instead of a Great Depression.
- "This is a very different animal than the Great Depression," Bernanke said, noting that was an economic crisis that stemmed from human problems instead of a public health emergency.
- Some economists have warned the economic fallout from coronavirus could be worse than the 2008 financial crisis.
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Former Fed Chair Ben Bernanke said the economic damage from the coronavirus bears more resemblance to one caused by a natural disaster instead of the Great Depression of the 1930s.
"This has some of the same feel of panic, some of the feel of volatility," Bernanke told CNBC. "It's really much closer to a major snowstorm or a natural disaster than it is to a classic 1930s-style depression."
Bernanke also noted there was a crucial distinction between the current economic crisis inflicted by a public health emergency and the Great Depression nearly a century ago.
"This is a very different animal than the Great Depression," Bernanke said. "The Great Depression, for one thing, lasted for 12 years, and it came from human problems: monetary and financial shocks that hit the system."
Many economists believe the unprecedented shutdown of the American economy is plunging it into a recession. And some say the fallout could be worse than the 2008 financial crisis as the shutdown is inflicting drastic damage across sectors, particularly among airlines, hotels, and restaurants.
"There is a real danger that the economic crisis that comes out of this health crisis is worse than what we experienced in 2008," Jason Furman, the former chair of the Council of Economic Advisers during the Obama administration, recently told Business Insider.
In the past week, Congress and the White House scrambled to assemble a massive $2 trillion stimulus legislation to arrest the fallout from the virus. It includes provisions to send $1,200 checks to Americans, boosted unemployment benefits, and critical loans to state government and shuttered businesses in dire financial straits.
The Senate and the White House announced early Wednesday that both sides struck a deal on the federal economic rescue package. A vote on the legislation is also expected Wednesday.
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