Very fascinating explanation in my opinion about why the stock market boomed in 2020 even though COVID substantially reduced spending in certain sectors and caused millions of Americans to lose their jobs:
Essentially the government pumped a ton of money into the economy, more than $1 trillion worth:
Spending on services like restaurants, travel and entertainment decreased significantly:
Which resulted in Americans as a whole saving an incredible amount of money according to the article:
Side note: I think one thing that’s fairly obvious is that providing stimulus checks to the vast majority of Americans was ineffective and foolish (though my wallet definitely isn’t complaining about it today). That’ll just be my or my children’s problem in the future when taxes go up but the vast majority of people who got the stimulus just didn’t really need it. Since the stimulus checks weren’t more targeted it just burdened the country with more debt than should have been necessary, but what else is new?
