The US economy is facing two serious shocks: the spread of the coronavirus and the drop of oil prices.

The combination of these two problems will likely drive the US economy into a recession.

In order to combat the coming recession, the Trump administration must move forward with an aggressive health and economic response.

George Pearkes is the global macro strategist for Bespoke Investment Group.

This is an opinion column. The thoughts expressed are those of the author.

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For most of the past decade, despite a parade of bad recession calls by pundits, assuming that US consumers and businesses wouldn't suddenly tighten their belts and create a recession was a no-brainer.

That period of low recession probability is over, and the US economy is likely to enter recession some time in the second quarter thanks to the global and domestic economic disruptions caused by the COVID-19 outbreak.

Prior to this year, consumers were able to keep spending in the face of volatile markets or economic sectors because no single shock at any one time was big enough to set off cascading job losses.

Whether it was the Eurozone crisis in 2011, the end of quantitative easing and oil price shocks in 2016, or the fall out from the Federal Reserve's interest rate hikes in 2018, the US economy has survived one off shocks over the years.

That is set to change. The number of Americans who have tested positive for COVID-19 is rapidly rising due to a combination of under-preparedness, incompetence, and signaling from the President to keep reported cases down.

Read more: Here are the latest updates on the spread of COVID-19»

The coronavirus shock is different

So far, data from China, Korea, and other countries suggests that the death risk of COVID-19 is very low for anyone under the age of fifty or sixty years old. But for older people, catching the disease is much more dangerous.

While there have been confirmed cases in the United States since mid-January, the disease was not yet growing exponentially until early March. With more than 500 cases and limited containment measures in the US, our case count will likely look similar to the thousands of reported cases in Lombardy, Italy or South Korea in short order. Confirmed cases have risen at a 27% daily rate over the past week; if that growth rate continues 140,000 cases could be confirmed by the end of March.

While most people in this country do not face mortal risk from the virus, over-reaction or at the very least prudent measures to stop the spread of the virus in an effort to protect more vulnerable community members will substantially reduce economic growth.

Any travel or large-scale gatherings are being cancelled at a rapid pace. Large-scale moratoriums of work-related travel, office closures, and major event cancellations are already underway. On the one hand, this is responsible policy for reducing the spread of the virus, and is to be applauded. On the other hand, it's a major demand shock.

The occasional office closure or cancelled concert is meaningless in the grand scheme of things. But these demand shocks can spread like a wave as a substantial drop in airline travel, major event spending, and even lunch customers near large office complexes will also squeeze the businesses that support those sorts of activities.

Slowing the spread of the virus will require mass behavioral changes from society as a whole, and those haven't started to take effect yet; too many Americans still think COVID-19 is being blown out of proportion. When they do realize that behavioral changes are necessary, specific sectors of the labor market will suffer dramatically, leading to ripples of lost income and demand across the country.

If we do see very large, uncontained outbreaks in the US, like the one currently being fought in the Lombardy region of Italy, outright bans on many forms of economic activity that come with mass quarantines will have a massive impact on growth. Currently in that region, schools, museums, night clubs, gyms, and swimming pools are closed, while funerals, church services, and other ceremonies are suspended. Travel is banned in and out of the region.

Given the utter failure to contain COVID-19 so far in the US, similar policy reactions are plausible in this country; even if they aren't, reducing transmission rates substantially won't halt all activity but it will reduce it dramatically.

The oil shock adds to the squeeze

We also need to talk about Texas. While more diversified than historically has been the case, the Texas economy is still heavily reliant on oil, and has benefited immensely from the US shale boom. But it's still about to see a serious hit to drilling activity, with a brutal impact on activity there and in other oil-exposed states.

Last week, the OPEC oil cartel tried to cut output in the face of falling demand, but Russia refused to join the bloc's commitment to pump less. As a result, Saudi Arabia announced over the weekend they would increase production and try to undercut other producers.

The sudden surge in expected supply and falling demand led to a huge drop in oil prices; that makes virtually all new US shale drilling uneconomic for the time being. In turn, we can expect the oil shock to hurt US business investment data and also add another headwind for US consumers

While lower oil prices will help offset some of the impact created by COVID-19, the US is now a net exporter of petroleum on a volume basis and one of the world's largest producers. This means that thousands of more workers depend on the industry, whether directly or indirectly, so the negative effects of an oil price drop are nearly equal to the boost from cheaper gas at the pump.

On top of oil, consumers and businesses will likely react very poorly to huge spikes in corporate bond credit spreads, massive equity declines (as-of this writing, S&P 500 futures were down 17.1% in less than a month), and higher market volatility. Financial markets are pricing a very large decline in activity, but whether they are pure cause or effect isn't totally clear.

How this can be fixed

There are ways out of this mess. Economist Neil Dutta was right to point out in a Business Insider op-ed last week that the Fed cannot by itself offset the shock of the virus, but it can make the blow less painful, and that's why I argued last week their rate cuts were a good decision. More cuts should and will follow.

If the Trump Administration wanted to prevent a recession, they would immediately work to keep demand up with a slew of programs to offset lost revenues or wages.

Replacing wages for workers at risk , offering loans to small businesses, and other measures would keep businesses from falling into bankruptcy and sustain consumer demand. Unfortunately, the Director of the National Economic Council, Larry Kudlow, has mistakenly argued for small-scale and targeted responses instead of a more sweeping program. Other potential stimulus measures that go further may be announced Monday afternoon.

There's no reason for personal panic over the threat of COVID-19, especially for healthy, non-elderly people. Americans are better-served by washing their hands regularly, touching their face less, staying out of crowds, and helping the elderly or those with weaker immune systems so they don't have to leave their homes than by sprinting for the nearest bunker and assuming the end is nigh.

But a recession is a disaster for working people, and even if this one wasn't forecastable there is still time for policymakers to soften its blow. The Fed will keep easing, but now is the time for Congress and the White House to pass broad, large-scale stimulus that will help offset some of the inevitable demand shock from COVID-19.

George Pearkes is the global macro strategist for Bespoke Investment Group. He covers markets and economies around the world and across assets, relying on economic data and models, policy analysis, and behavioral factors to guide asset allocation, idea generation, and analytical background for individual investors and large institutions.