I see that statement quite regularly these days: “We have destroyed the economy!” And I agree that we’ve dealt it a terrible blow. But a fatal one? Isn’t that as prematurely doom-laden as the “COVID will kill us all!” folks?
I’m as concerned as most people. In fact, one of the particularly terrible things about the current crisis is that it’s a wallop in the gut on so many levels and topics that evoke deep fear and/or anger: health of self and/or loved ones and others, economics and finance, government overreach, politics, social cohesion, press bias, and personal isolation.
But on the economic front – the stock market had already undergone a huge drop right at the beginning, before the government had done much of anything. In many places in the country, businesses were already floundering; people were already not going to restaurants, sports had been canceled as well as concerts and many other gatherings. Even now, portions of the economy are still functioning: groceries stores, pharmacies, and trucking, to take a few examples. But a large part of the economy is shut down and gravely threatened, with many small businesses set to fail.
It’s awful, actually. But how much actually is self-inflicted as a result of what the government has done? How many of these businesses would have continued to function and kept their head above water if state and local governments hadn’t forced shutdowns or shelters-in-place or whatever you want to call all the present edicts forcing us to stay home? More would almost certainly survived than is likely now, but how many? And for how long? What if, without any shutdown, things had gotten much worse in terms of people dying? Would restaurants, for example, have just gone on as before?
I doubt it. But I don’t know; that’s why I couch these things in the form of questions.
And at what point is an economy “destroyed”? Can we not recover? Maybe yes, maybe no, maybe not back to the level we achieved before this happened. How long will it take, and how hard will it be along the way, and how much will change as a result?
Predictions on that seem as iffy as predictions on all the rest. In this post, I’m not even including links to economic prognostications (although feel free to discuss it all in the comments) because I don’t think anyone knows. Previous recessions and depressions and downturns had more to do with fundamental problems or forces within the economy, but this one is self-imposed and/or imposed by a health crisis that is not primarily economic. And it appears to be worldwide, particularly in the developed countries that so far seem to be the ones hardest hit.
I actually think that, in this situation, that much-overused word “unprecedented” is warranted.
