ROCKFORD (WREX) — The COVID-19 pandemic has done far more than threaten people's health.
"It will have very damaging effects on the economy," says Professor Carl Campbell, Chair of NIU Economics Department.
Campbell says the quick spike the nation has seen in unemployment is similar to the what it experienced in the Great Depression. However, that happened gradually whereas what's happening during the COVID-19 pandemic has taken only weeks. He says what will keep the US from a depression is the stimulus package.
"If there was no stimulus it would have led to a depression. Because of the stimulus a lot of this will be mitigated, it won't be nearly as bad as the Great Depression."
Campbell says he's most worried for small businesses who may have trouble picking back up once the dust has settled. Especially since they will be up against numerous other businesses when it comes to getting local, state, or federal aid dollars.
"It's going to be a very difficult process, I'm going to worry about a lot of businesses shutting down permanently because of this."
On a positive note, Campbell believes once the virus settles and more importantly if advancements are made toward finding a cure, people's confidence will in turn create a boost of economic energy.
"You have a lot of people staying home saving money so they have cash to dole out. The stimulus money, pent up demand. People haven't been to restaurants or buying flights or things like that."
He says while staying home is hurting the economy, going out would be even worse for it.
"Do the social distancing right now. Studies showed in the Spanish Flu epidemic, cities that did the best job of preventing the spread actually had the strongest economic rebound."