Economist James Paulsen calls it “Recession by Proclamation.”

Rather than waiting for two consecutive quarters of economic retraction – the usual definition of a recession – experts jumped in last month and declared a COVID-19 recession. 

There was little pushback, because by now everyone understands that shutting down our education, hospitality, entertainment, travel and sports industries, along with discouraging gatherings of more than a handful of people, brings the nation’s $22 trillion economy to a screeching halt. 

The questions that Paulsen and other experts are now focused on are how soon and how much economic stimulus will it take to restart the economy.

The official answer last week from Washington was $2 trillion. That’s the size of the economic package approved by Congress, although some experts say the impact will be closer to $4 trillion with leveraging. 

For most people, those are incomprehensible numbers.

To add a little perspective, the New York Times noted that $2 trillion is more than twice the size of the $800 billion bailout Congress approved in 2009 when the financial system collapsed under the weight of unpayable mortgage debt. 

It’s also “hundreds of billions of dollars more” than the entire federal budget, if you don’t count Social Security and other social safety net programs, the Times said.

Congress’ relatively quick action surprised many, including me. My fear was they would dawdle, like they did during the financial crisis when failure to approve a stimulus package in the fall of 2008 made the crisis much worse. 

Make no mistake, this crisis is worse, and the sooner we take our medicine in the form of the economic pain needed to stop the virus from spreading, the sooner things can return to normal, or something approaching it.  

I suspect that this time members of Congress remember the 2008 fiasco, making it easier to do what is needed. It didn’t hurt that some high-profile members of Congress were sidelined by the COVID-19 virus. 

Following passage of a stimulus package, attention turns to recovery, which is where things can quickly fall apart if we fail to continue social distancing and other precautions that medical experts say are needed for weeks, probably months, to come.

It’s already become – probably always was – a political crisis. 
Many experts acknowledge that President Donald Trump’s dream scenario of a strong rebound this summer is unrealistic. The economic damage came too fast and is already too deep for that to happen.

Especially when you factor in that this is a worldwide pandemic, not a regional, seasonal flu problem.

Plus, we don’t have the virus under control yet. Nor can we reasonably expect that to happen in Trump’s time frame. 

We need to be doing two things right now. 

First, we need to battle the pandemic with all the resources we can muster and pray we get the situation under control sometime reasonably soon, by which I mean in a matter of months.

Second, we need to start planning for how we will function as a society, as a nation, as a community when we get to that point. 

By then many things will have changed. We need to know what, and how best to do deal with the changes. 

Republicans need to prod the president to establish planning teams to figure out how our divergent economies will function in the near and distant future.
Democrats should be doing the same thing. Presumptive nominee Joe Biden should have a team in place that can tell us by Labor Day what he will do. 
Although we may have entered this new recession overnight by proclamation, it’s going to take a lot of hard, smart work to get out of this.