3 ms·
Yes, of course, but think beyond the immediate consequences. If that -30% collapse in consumer spending affects mostly, say, half of all businesses, that half
by cs702 7y ago
Yes, of course, but think beyond the immediate consequences.
If that -30% collapse in consumer spending affects mostly, say, half of all businesses, that half will see its consumer revenues collapse by around twice as much, or -60%. Most of those businesses will fail and most of their employees will be out of a job, contributing to a greater collapse in consumer spending.
The economy seems to me unlikely to be able to "repurpose all those human atoms" quickly enough, as many people are and will be understandably afraid of returning to work before there's a treatment or vaccine.
- proverbialbunny 7y agoPreviously when we have large problems like this, companies are not allowed to loan out so much debt it would bankrupt many non-startups. If it's different this time, it's because companies are allowed to loan at far more than they should be able to. The last time companies (and people) were allowed to loan out so much it caused major problems was 1929. The Spanish Flu crashed the stock market pretty badly with a quick recovery in the 1910s similar to today, but loaning was not crazy then so it didn't hurt the economy in the long term.