A Changed America: Life after the pandemic.

• Author: Ullmann, Owen

As the United States struggles to return to some semblance of normalcy from the coronavirus pandemic, economists and political scientists are trying to assess the extent to which this once-in-a-lifetime event will change the nation over the long term. At this juncture, even year-end forecasts of conditions are hazardous given all the uncertainty about the persistence of the virus and the development of successful treatments and a vaccine. Optimists see a swift health recovery and economic bounce-back, while pessimists warn of dire times for years to come. Reality usually occurs somewhere between those two extremes.

Based on what we already know about the virus, it's safe to say that the pandemic will have a lasting impact on the economy, our health system, and our government. The changes won't be as jarring as those that followed the Great Depression, which lasted more than a decade. And the extent of permanent changes will be determined by the fall election: If President Trump is re-elected and he retains a Republican majority in the Senate, he will push to restore the pre-pandemic era. A sweep by former Vice President Joe Biden and Democrats in Congress will usher in a more activist government, particularly in the area of health care.

No matter who wins, significant changes seem inevitable. Here's an overview of what to expect:

The economy. The damage to date is unprecedented in our lifetimes and the recovery will be slow, many forecasts conclude. The Federal Reserve's Federal Open Market Committee predicted on June 10 that the economy would grow a robust 5 percent in 2021 after a jarring 6.5 percent drop in 2020. It projected unemployment at 9.3 percent by the end of this year and 6.5 percent at the end of 2021. That outlook is more bullish than many private projections and seems in line with the optimism on Wall Street, which saw a remarkable rebound in stocks this spring, fueled in part by a far better than expected unemployment report in May. Still, the high unemployment the Fed sees lasting into 2021 suggests a continuation of depressed demand and financial trouble for many struggling businesses, which continue to fail on a daily basis.

"I think we'll begin recovering in the second half of this year, and it could rebound quickly for a while as businesses re-open, but that will be limited. After that, it's going to be slower than people will be happy with," predicts Donald Kohn, a former vice chair of the Federal Reserve Board of Governors and now a senior fellow at the Brookings Institution. (See TIE's interview with Kohn on page 44.) "It's going to be a very long time before we get back to that beautiful place we were in a just a few months ago--3.5 percent unemployment, lower-income workers getting bigger raises, and more prime-age workers being sucked back into the labor force."

"We entered the coronavirus shutdown in a great position as an economy. It might take way more than two years to get back to that position," Kohn added in a forecast consistent with the mid-year outlook by the FOMC. "In the meantime, we'll need to adapt to a number of factors that...