THIS DAY IN HISTORY:
24 November 1970 The United States and the USSR ratified the nuclear non-proliferation treaty.1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
The US leadership in the number of coronavirus infections has become undeniable. However, the American experts predict that the domino effect, with which the practice of bankruptcies will spread across the states, risks to leave the harsh 2008, which made a significant part of the US enterprises and banks insolvent, far behind.
The fact that the situation in 2020 will be much worse for the US economy is confirmed by Desmond Lahman, an expert at the American Enterprise Institute, in his analysis. According to him, it’s worth preparing for a wave of bankruptcies now. First of all, the small business is suffering at the moment.
If during the period of the global crisis of 2008-2009 in the USA, about 170 thousand enterprises were closed for the entire period, then only in the last three months, about 630 thousand enterprises were closed in the country.
“If the enterprises do not resume work in the very near future, a country will face damage that the US economy has never experienced,” said Aaron Klein, representing the Brookings Institution. The expert cites baseball games, which are of great symbolic importance for ordinary Americans as a marker. The economists’ forecast for the coming year is disappointing: from 200 thousand (at best) to 1 million companies in the country will go bankrupt.
Another American expert, Ami Kuokenbos, the acting director of the American Enterprise Institute, believes that the companies will be the first to go bankrupt in April-May, and that the state’s population will join in the process.
The statistics show that over the past three months, the number of unemployed in the United States has exceeded 17 million people.
For a comparison, the experts point out that the result of the previous financial crisis of 2008-2009 was the appeal for unemployment benefits of about 8.7 million citizens.
The American authorities seem to share the concerns of the experts. It is known that the Senate and the White House made a joint decision to stimulate the country's economy by $ 2 trillion. The amount significantly exceeds the amount of cash that was spent during the 2008 crisis.
If earlier the state saved the banking system, in the current situation it is planned to direct the funds as the assistance to the enterprises and employees.
At the request of the publisher, the experts from the Liquidation and Bankruptcy Bar Association commented on the situation. They noted that fears about the United States are absolutely justified, although the wave of bankruptcy will sweep over not only the States, there is no way to avoid the domino effect.
“Another question is that in both the American and the European legal systems, the bankruptcy procedure has always been different from the one we have in Russia. The formal side is that the bankrupt officially says goodbye to the old debts and starts a new business, a new life,” the expert of the Association added.
However, this goal cannot be achieved due to the fact that the financial crisis that is affecting the United States will not allow not only to start a new business in the nearest future, but will also provide the state support to those citizens, who will be declared bankrupt or unemployed.
“The dollar needs something to be provided and supported with. The terminated production and the lack of the necessary gold reserves can lead either to the next Great Depression or to active militaristic expansion,” the expert summed up.
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