4 truths about America's rapidly shrinking economy

The U.S. Bureau of Economic Analysis released its quarterly data on Thursday, showing a shocking 9.5 percent decline in GDP during the second quarter of 2020.

Here are four quick takeaways:

1) The economy is in the toilet. This is by far the worst single-quarter decline recorded in statistics that go back to 1947, and likely the worst in American history. In per capita terms, the economy shrank back to its size in mid-2013 in just three months. New unemployment claims have been holding steady for weeks at a level several times higher than the worst point of the Great Recession.

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2) The coronavirus rescue packages are working. Roughly three-quarters of the GDP loss was due to a collapse in personal spending, which fell by over $1.3 trillion. However, overall personal income actually grew by 7.3 percent, thanks entirely to the boost to unemployment insurance, the economic impact payments, and other government rescues. Many are suffering or left out, but the bulk of the American people are scraping by for the moment.

3) Recovery is not coming soon. Studies demonstrate that it is not government closures that cause most of the decline in spending, but instead the presence of coronavirus. Because President Trump has allowed the pandemic to rage, the economy will not return to its previous strength for the indefinite future.

4) If the rescues are not renewed, heaven help us. America is in a severe emergency that will get much worse on the current track. Super-unemployment is in the process of expiring across the country, and Republicans recently proposed slashing it by two-thirds. That will likely end with tens of millions being thrown out on the street.