(TheFreedomFlag.Com)- Nobel Prize-winning economist Vernon Smith said recently that the United States economy could rebound extremely quickly after the coronavirus pandemic begins to die down. According to Zenger, the economist suggests the U.S. will not experience long-term effects caused by the economic shutdown, as long as the government doesn’t get too involved.
Zenger reports that the renowned economist believes the “German Miracle” is a good example of how economies can rebound when the government gets out of the way. This was the time when West Germany got rid of price controls, allowing businesses to bounce back and start rebuilding after the devastating economic impact of World War II.
The outlet reported how, in the six months following the reforms of 1948, the industrial output of West Germany went up by 50% and annual growth also increased by 8% throughout all of the 1950s.
“I would say economic activity will return quickly; expectations will be buoyant as everybody looks to recovery, not further decline,” Smith said. “This is why SUSPENSION seems like the right word.”
At 93 years old, Smith has many decades of experience to draw from. Smith can remember the days of West Germany and its economic recovery.
“Remarkably, people generally don’t learn from national ‘experiments’ like the German…People have no conception of free economies as self-organizing systems, in which specialization of labor and capital is driven by people’s choices governed by prices, as a coordination system supporting vast cooperation,” Smith added.
Smith explained that should the government get out of the way and allow the economy to rebuild itself naturally, people could find themselves working and living relatively normal lives again within months.
However, that doesn’t mean the short-term impact won’t be tough. In just two weeks, almost 10 million Americans have applied for unemployment benefits. Small businesses all over the country are looking for ways to change the way they make money, keep things ticking during the pandemic, or simply laying off staff to avoid going under.
“Of course these are times that are not part of our past experience; hence, the likelihood of occurrences that we cannot imagine,” Smith added. “We never know what we don’t know, but learn about when the unimaginable happens.”