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"How much of the economy is truly essential to living? Tourism is great" That's fine, but this is the wrong way to think about it in the short run. >>>> You c
by jariel 7y ago
"How much of the economy is truly essential to living? Tourism is great"
That's fine, but this is the wrong way to think about it in the short run.
>>>> You can over time reorganize our economy along many different lines but you can't do it quickly, and often not even organically.
There are much deeper, more systematic issues you'd have to get at in trying to address such things, particularly with respect to property ownership, etc - and these are hugely existential questions.
You're going to be telling 100 of millions they're going to lose on all that they've worked on for their entire lives etc.
Like changing the rules mid-game.
>>>>> This is not an academic discussion - the world is burning down.
Every piece of the economy is interconnected. Large downturns in some areas radically affect others.
The economy is a dynamic equilibrium that only has so much capacity for shifting around.
'Tourism' is a huge part of the economy (a few points) and if that goes, then you see the cost of social services go up dramatically, unemployment, consumption goes down.
It's not just the 'resorts and hotels' it's all the subsidiary businesses. They all go down.
Airlines generally operate on thinner margins - if tourism goes, then airlines go down for sure. There is no alternative but government takeover / Chapter 11 / restructure - or total collapse of airlines. Sales drop for aircraft, Boeing lays off and cancels new plans. That's restaurants, hotels, construction, real estate, manufacturing, massive supply chain - all down.
And that's just the tip of the iceberg.
Central Banks around the world are printing money like it doesn't matter, balance sheets are exploding to the point wherein normal conditions we would have nations declare bankruptcy.
It's clear that people generally have no idea what's happening in our systems. This is not 'a recession' ... we're facing 'total implosion' unless we act responsibly.
- paulryanrogers 7y ago> You're going to be telling 100 of millions they're going to lose on all that they've worked on for their entire lives etc. Does it have to be this way? Why not put certain things like rent, utilities, mortgage payments on pause--even if just for those on furlough? I realize those who are heavily leveraged may suffer, like airlines who bought back stocks instead of maintaining a war chest. And ultimately I agree that lockdown isn't practical in the long term.
- jariel 7y ago"Does it have to be this way?" Yes, pretty much. I'm really struggling to deal with the odd economic intuition here in the comments section. I'd urge readers to start to think about how every bit of the economy is interconnected and that it just can't magically 'stop'. "Alberta's premier, Jason Kenney, unveiled projections for the province's unemployment rate on pace to reach 25 per cent." [1] and this is in the short run! Have a look at this jobless claims graph [2] - and it's already out of date. Even if we could magically deal with massive reduction in GDP (maybe we can, but probably not) - the economy cannot realign itself quickly. Such an adjustment would take decades to do organically. We have no ability to centrally re-allocate every aspect of the economy. We can do it in some parts of some of sectors - banking and finance for example (sometimes with mortgages), but even that is risky and very unfair. It's not just 'airlines' - it's vast swaths of the economy, that take down other parts of the economy. At least travel, energy, tourism, hotels, restaurants, entertainment, most manufacturing - just to rhyme of a few are 'shut down'. That's a monster part of the economy. " Why not put certain things like rent, utilities, mortgage payments on pause--even if just for those on furlough?" Because everything is connected ... the money that goes to your rent, utilities, groceries, gas, it's not some magical place obviously. There are economic endpoints there, jobs, consumption, taxation - and a lot of them. The banks employ millions of people doing lending. There are millions of people that act as landlords and who depend on that income. They're also mortgaged often. Utilities employ a lot of people, they also buy services. And what about the people like my parents who don't rent and have no mortgage? Consider the both the scale and timeline of the economic intervention right now: we are printing money and doling out literally Trillions of dollars (!!) very quickly, willy nilly. Unbelievable numbers. What this means is the government/central banks are realigning the economy temporarily and 'deciding arbitrarily and quickly' who is going to win and lose - and then putting off payment to taxpayers in the future - and this will last generations. This is happening on a global scale. If that's not shocking enough - all of this is a temporary fix! All these massive bailouts won't last very long. The various programs announced in Canada for example last about 4 months, but Covid will last probably 18-24 months. Again: Contact tracing (with intervention) is not only a reasonable solution, it's basically the only current viable option to get going outside of a cure or vaccine. [1] https://www.cbc.ca/news/business/jobs-unemployment-rate-covid-19-1.5526961 https://www.cbc.ca/news/business/jobs-unemployment-rate-covi... [2] https://www.businessinsider.com/us-weekly-jobless-claims-record-coronavirus-unemployment-insurance-labor-recession-2020-3 https://www.businessinsider.com/us-weekly-jobless-claims-rec...