The Four Rules of Pandemic Economics - Deepstash
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A new playbook

Growth evangelists are right when they state that severe lockdowns produce a parallel human misery of unemployment, looming bankruptcies, and extreme financial anguish. Yet, opening the economy too soon may produce mass death.

We need a new playbook for pandemic economics to govern our short-term reaction to the health crises.

104

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The false choice

“Save the economy or save lives” is a false choice.
A group of economists published a paper on the 1918 flu outbreak. Their findings revealed:

  • Early and aggressive interventions saved lives and triggered a faster rebound, such as job growth and banking assets.
  • Without a healthy population, there can be no healthy economy.

The hope is for a deep, short recession, to show that people have shut the economy down to limit the spread of disease.

108

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A living wage

Asking millions of able-bodied workers to stop working creates a crisis of unemployment.

During this time, the U.S. is expanding unemployment benefits and are also delaying tax filing. In northern-European countries, the government is directly paying businesses to maintain their payrolls to avoid mass layoffs and furloughs.

94

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A time machine

Many small-and-medium-sized companies face extinction during the pandemic shutdown. While their income is gone, they still owe wages and rent to landlords. 

This could lead to cascading bankruptcies. A time machine is needed, where grants, cheap loans, and debt relief would allow companies to shift their expenses to the future.

94

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Science

A three-or four-month freeze is one thing, a full year of isolation and economic inactivity is disastrous.

Our lack of knowledge about the virus is our greatest weakness. More tests can reveal more information that should lead to defeating the disease as fast as possible. There is no such thing as a normal economy until we contain the virus.

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