I recently had a conversation with my partner about the last family movie night we enjoyed together. Our quaint one-screen cinema in our small Oregon town was a beloved spot where we used to catch a film once or twice each month with our three kids. However, since March, we haven’t been able to attend a movie or dine out as a family. Our summer didn’t include visits to the community pool, and we went months without haircuts. I even canceled my gym membership, and my partner hasn’t indulged in a spa day in what feels like ages. We had saved for a family trip to Disney World this October, but ultimately decided to cancel and hold onto our funds. If you’re reading this, you might be experiencing a similar COVID-19 lifestyle: staying indoors and avoiding social gatherings.
Of course, I recognize that our situation is relatively minor compared to the struggles many Americans face. Millions have lost their jobs, and tragically, over a quarter of a million lives have been lost to the virus. The pandemic has not spared anyone.
On a more hopeful note, there exists a significant portion of the American populace that has been working from home, staying inside to help flatten the curve, and saving the money they typically spent on outings like bars and concerts. The savings from eliminated commutes—no more gas station snacks or coffee runs—are accumulating in many bank accounts.
And it’s a considerable amount. Economists estimate these savings to be around $2 trillion, approximately 10% of the American economy. Ian Johnson, the chief economist at Future Economics, has dubbed this phenomenon the “Biden Boom.” He noted, “President-elect Biden is stepping into office at a pivotal moment. The state of COVID-19 will likely be dire at his inauguration, but that won’t last long.”
The Pressing Question
The pressing question is: how long will it take? Accessing those funds will hinge on the successful rollout of a vaccine. We’re closer than ever, but given the sobering reality of the COVID-19 death toll, even a few months can feel agonizingly long.
Both Pfizer and Moderna have promising vaccines, according to reports from USA Today. However, they face substantial hurdles in gaining FDA approval, manufacturing, and distribution. Additionally, many people may hesitate to receive the vaccine. Therefore, the transition won’t be instantaneous; we won’t just flip a switch and resume pre-pandemic spending habits. Nevertheless, if all goes well, it could significantly boost the economy.
Future Spending Habits
What will people choose to spend their saved money on? Joel Smith, chief U.S. economist at Future Analytics, remarked that just because we’ve been deprived of certain experiences doesn’t mean we’ll rush to make up for them all at once. He predicts it may take another two years before spending on travel and entertainment reaches pre-pandemic levels. Even after a vaccine is widespread, it may take a while for people to feel comfortable venturing out and spending freely again.
I can relate to this hesitation; I’ve navigated two rounds of layoffs at my primary job, which makes me wary of spending like I used to. After almost a year of adapting to life with this virus—yes, it’s been that long—there is a sense of hope emerging that I haven’t felt in quite some time. After enduring months of bleak news, a glimmer of positivity is a welcome change.
For further insights, check out some related articles that might pique your interest, such as this post on home insemination kits and the benefits of intrauterine insemination from a trusted source.
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In summary, the anticipated “Biden Boom” hinges on the successful distribution of a vaccine, which could unlock substantial savings that Americans have accumulated during the pandemic. While there is hope for economic recovery, it may take time for individuals to feel comfortable spending again.