The COVID-19 that currently engulfs the world has wrought illness, death, chaos, and creating fiscal uncertainty. Trillions of dollars of national wealth the world over has been spent fighting this outbreak, tens of millions of Americans have lost their jobs due to COVID-19, over a million have been diagnosed with the virus, and tens of thousands have tragically lost their lives.
The American economy, which had been performing at the highest levels ever recorded just before the crisis, was literally overnight forced to come to a screeching halt. Businesses were closed, some were forced to adapt to work from home, while others were just forced at home with no income.
Small business owners, who put their life savings, heart, sweat, and dreams are being forced to watch helplessly as their life’s work goes down the proverbial drain. The employees who earned their living at these small businesses suddenly had no income.
The American economy is far too large to stop on a dime, and will not move forward quickly once this crisis has passed. However, the manner in which the economy was shut down and, in some states, slow to re-open, will be the catalyst of the next crisis our nation, and our region will be forced to endure, a fiscal crisis.
There are currently over 30 million Americans unemployed, while others have seen their income drastically reduced. Discretionary spending is near zero. People cannot make their bills, and this will create a vicious spiral for the government at all levels.
Government, federal, state, and local, is completely funded by the collection of a variety of taxes. People who do not have money to shop, do not pay sales taxes to state and municipal governments. People who do not have a paycheck coming in do not pay income taxes to the federal and state governments. People behind on their mortgage do not pay property taxes, the main source of funding for our schools.
I will use Orland Square mall as an example. Since 1976, the mall has been an economic juggernaut in the southwest suburbs. It has generated jobs, opportunity, and a tremendous amount of revenue to the local governing bodies. Since mid-March, this economic machine has been shut down, with no opening date in sight. The mall will certainly generate far less revenue that usual and the local government units will have to reduce costs or run deficits, and delay the recovery from the Great COVID Crisis of 2020.
In short, once this public health emergency passes, we will have a fiscal crisis to test us. It will be a long way back to normal.