Four big barriers to a recovery

There is no easy road to an economic recovery, said Robert Samuelson. “The biggest and most important obstacle is a surge in coronavirus cases,” which we’re already seeing across a number of states. But there are other concerns. Small businesses accounted for 40 percent of the jobs created in the last economic recovery—some 8 million jobs in total. But this time they face “a fundamentally hostile economic environment” that favors big companies with easy access to credit. Consumer spending will take a hit if the federal government’s expanded unemployment benefits—an extra $600 a week—are not extended past

July. The benefits represented a “stupendous increase for many beneficiaries,” in some cases replacing more than 100 percent of their previous income, and it will “probably affect the pace of recovery” if those payments are abruptly withdrawn. Lastly, we are facing a critical debt situation. Corporate borrowing, spurred on by extremely low interest rates, was a staggering $16 trillion last year. The most worrisome part of this is in the form of “leveraged loans”—money lent to businesses already laden with debt. As businesses try to cut costs to handle this overwhelming debt load, they will “exert a drag on the recovery.”