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Last week, more than 3.3 million Americans applied for unemployment benefits. This is a record number that has not been seen for many years in the United States. This has been contributed by the closure of the entire US economy. Both small and large businesses have suspended their operations for weeks and this is what is attributing to historic levels of unemployment across the US. All over the country, restaurants, gyms, and barbers shops have been closed and since these small and medium sized businesses are the backbone of the US economy, many people have lost their jobs and this has placed the whole economy on the verge of a collapse. This is the biggest economic meltdown since the 2008 financial crisis.
Last week, the US saw the biggest increase in new jobless claims in history and this has exceeded the 695, 000 records that was set in the 1982 economic meltdown. Many economists are warning that this is the beginning of a historic spike in unemployment levels in the United States. Many experts are warning that this number can easily jump to 40 million in a few weeks if this current health problem is not promptly addressed.
Workers who have been laid off said that they had to wait for hours on the phone to apply for unemployment benefits. At the same time, websites in some of the states like New York have been crashing because of millions of people are visiting the sites to file their unemployment claims. “The most terrifying part about this is that this is likely just the beginning of the layoffs,” said Martha Gimbel who is a labor economist working with Schmidt Futures. The nationwide unemployment rate was at record lows of 3.5 percent in February and this has sharply risen to 5.5 percent in just a matter of weeks. The United States economy is already headed to a depression if this disruption continues and despite the Federal Reserve’s intervention, it is clear that this is the biggest economic collapse since the great depression.
The unemployment numbers are skyrocketing every passing day especially when President Trump anointed that more than 10 people should not gather together at the same time. This forced restaurants, gyms and other public places to close all across the country. This is the biggest disruption of business activities in the history of the United States. We have unprecedented levels of layoffs that we never saw even during World War 2. Things are changing very fast and experts are warning that if this situation is not contained, we will have social unrests and American societies will be affected in many ways. It is actually reported that the number of Americans buying guns has increased as people fear the worst can happen because of the lockdown.
There is a very high chance that many Americans have not yet applied for unemployment benefits and this means that the actual number of layoffs exceeds the official report of 3.3 million. In most states, the self employed, students’ undocumented workers and those who take gig contracts are not eligible to apply for any unemployment benefits. These people to have been affected and they have lost their income. The income of such people has dropped to zero and they have no way to pay their rents and mortgages. These people too are not working and this means that the actual unemployment numbers in the United States might be a double of what is officially announced by the government.
The Federal Reserve has been pumping a lot of cash to the economy for years and economists are worried that this might cause damage instead of helping the economy. The FED will have to print trillions of dollars as a way of raising cash to bailout American companies and workers. This will hurt the economy in the long run because printing more cash will make the dollars lose its value. We will have a lot of cash chasing a few products in the market and this will result to a hyperinflation that we have never seen in the American history. It will not be a surprise if we wake up one day and realize that the US dollar has lost 30-50 percent of its value. The US economy is going through a historic economic meltdown and this should be the moment of reality for most Americans.
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