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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.
“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:
The hope is for a deep, short recession, to show that people have shut the economy down to limit the spread of disease.
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.
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.
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.
SIMILAR ARTICLES & IDEAS:
The economy shut down almost overnight. But reopening it will not happen the same way. It may take months and possibly years to fully open, even under the most optimistic estimates.
The proposed three-phase plan will allow many businesses to open in the first phase.
Schools and daycare centers can open in the next phase. But that means millions of working parents could be asked to return to their jobs before they have someone to take care of their children.
In the early phases of reopening, businesses could be required to operate at a reduced capacity.
Offices might operate in rotating shifts, but other businesses could have a harder time. Restaurants may have tight profit margins even in better times. Operating at half capacity may mean working at a loss.
The current pandemic has led to an economic free fall which is unparalleled in history. In the US alone, the unemployment rate plummeted at such a speed that more than 10 million have claimed unemp...
The Pandemic Lockdown in the U.S. directly affects the livelihood of a shocking 80% of American workers who work in retail, real estate, education, entertainment and restaurants.
Many of these offices and stores are not going to open after that.
While fighting the new virus economy worldwide has seen a huge growth in unemployment. Therefore, measures are to be taken and this as soon as possible. Maybe the most significant factor into getti...
Getting the worldwide economy back on track requires workforce. Providing this workforce requires healthy individuals able to work hard enough to help things get better. Governments are now trying out ways to officially have people's health checked: by providing different types of certificates, for instance. The major concern, however, is in regards to everybody's privacy: while these certificates do prove our immunity, research institutions are working on developing tools that can also protect our data.
It might be that only by certifying workers' immunity, states can help their economy know growth again. However, in order to make the people who get certified take up positions that require direct contact with customers, there will be a need for encouragement from employers' side, such as pay raises. As this is maybe the only real option, countries worldwide are going to have to apply the method.