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Why this contentious transition is so perilous for the economy

Even under this circumstance, however, there were still significant disagreements over how to respond to the crisis: how the Troubled Asset Relief Program (TARP) rescue money should be spent, what conditions should be imposed on banks that have received the money, how auto companies should be treated, and much more. People knew a change was coming, but not what was going to happen in the meantime, and they feared that no one was really responsible. The crisis has intensified.

I have focused on the economic crises, but the problem is even bigger than that. Some of the country’s biggest political crises also occurred during the transition. In 1860, Abraham Lincoln won the election, promising a clean break with the Democrats and incumbent President James Buchanan. The election of Lincoln has raised tensions. States have spoken openly about secession.

President Buchanan, a lame duck, announced that he did not believe the federal government had the power to prevent states from leaving. Within weeks, South Carolina voted to secede, followed by six other states, all before the inauguration. Shortly after Lincoln took office, the Civil War began.

Which brings us to 2020. Even before the elections, the coronavirus had exploded and was raging across much of the country. The United States has had more than 140,000 cases in one day, an increasing number of hospitalizations and has even witnessed several super-propagative events in the White House that have infected the president, his chief of staff, members of the cabinet. and senior advisers.

Economists have stressed from the start that controlling the spread of the virus is essential to repairing the economy. The CARES Act, the bailout passed in March, provided temporary relief in hopes the virus would abate quickly. But as that money ran out, a wide gap opened between the approach of the outgoing Trump administration (which has repeatedly advocated for less and downplayed the seriousness of the problem) and the new Biden administration, whose the first action after the election was to appoint a board of medical advisers and push an aggressive agenda to bring the coronavirus under control.

And so the nation, once again, counts down the months before a new administration changes the direction of the country, wondering what policy the federal government will pursue in the meantime, and observing a pre-existing problem that could easily get out of hand. while we wait.

The good news is that there is a good chance that we may have an effective vaccine widely available next year.