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It's hard to say that this Great Pause actually "worked", since the governments of the world had to dump trilions into stimulus to make businesses not simply di

It's hard to say that this Great Pause actually "worked", since the governments of the world had to dump trilions into stimulus to make businesses not simply die. We and our children and our childrens' children will be paying for this with our taxes for decades to come. If we have another Pause in the next few months, then it will be the body blow that completely cripples the economy, especially in the US. I can't see many small businesses surviving on a fraction of the income, especially when their margins are razor thin already.

buzzkillington 6y ago
We already have the second wave in the US being worse than the first wave. You can pause an economy for 6 weeks, you can't pause it for the 18 months to 5 years it would take to create a vaccine for the virus. At the end of the day this is a very benign plague that kills people who already have health conditions (and a few unfortunates). If anything the two to five million projected to die will make society better off since they were by and large resource sinks. But we will not know which was the right way to go about this for at least another 5 years.
rsynnott 6y ago
No-one’s saying it worked, as such (what would this even mean?) But it arguably didn’t cause the sort of rapid chaos (breakdown of supply chains swiftly followed by social order) that conventional wisdom says this sort of thing should. At least in places where COVID has been largely suppressed now, the second time round shouldn’t be as economically shocking as the first; there’ll be way more focus on the test-and-trace approach that we just weren’t set up for in February. I would be somewhat worried about places where it was never really suppressed when it spikes again, though.
- tathougies 6y ago
  Conventional wisdom says that the market will adapt if there is a reasonable hope that this is truly temporary. I dunno about you but my family all believed that the stimulus was fine and it would work out but only because this is expected to be one time and temporary.. Making this permanent or even dragging it out would have severe economic consequences
sandworm101 6y ago
Viruses tend to get less deadly over time. There are scientific reasons for this (ie the people most in danger die off earlier, or social adaptations favour spread by more benign strains over the killers). I expect the second wave to be more widespread but result in fewer deaths. The economic impact is more dependent on how we handle the crisis. If we handle it badly, ie how we are now, it will be worse than if we take the more mature approach.
- DuskStar 6y ago
  Well... Both of those causes are bought with lives. So by reducing the number of cases and deaths, we may also have reduced the amount that the virus has attenuated.
  - sandworm101 6y ago
    When it comes to disease, all progress is bought with lives. We learn by our mistakes, at least we should. Those mistakes do mean dead people. But we still have to act.
lefrenchy 6y ago
Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.
- eloff 6y ago
  The question is, was this a free lunch then, or will it be paid for via inflation?
  - lefrenchy 6y ago
    Yeah, I accidentally left that out of my comment. I agree though, inflation is what we need to be careful of. I don’t like the rhetoric that we will need to pay it back in taxes though because I find it misleading. The real is inflation, not some debt to be paid.
  - cheerlessbog 6y ago
    Inflation is too much demand chasing too little supply. If the money printing simply replaced missing demand, should we expect any inflation?
    - jackcosgrove 6y ago
      If demand stayed constant while supply decreased because fewer people were working, yes I would expect inflation.
    - eloff 6y ago
      I think that's too simplistic. If it were true you could just print your way out of any down turn with no consequences. Crazily enough there is a mainstream view in macroeconomics that you can do just that. I think people aren't stupid though. If suddenly there are more dollars, then a dollar should be worth less. Hence inflation.
- anoncareer0212 6y ago
deleted 6y ago
[deleted]
twblalock 6y ago
We will also pay for it in cuts to social services, especially at the state and municipal levels, unless we raise taxes to pay for those too.

buzzkillington 6y ago

We already have the second wave in the US being worse than the first wave. You can pause an economy for 6 weeks, you can't pause it for the 18 months to 5 years it would take to create a vaccine for the virus. At the end of the day this is a very benign plague that kills people who already have health conditions (and a few unfortunates). If anything the two to five million projected to die will make society better off since they were by and large resource sinks. But we will not know which was the right way to go about this for at least another 5 years.

rsynnott 6y ago

No-one’s saying it worked, as such (what would this even mean?) But it arguably didn’t cause the sort of rapid chaos (breakdown of supply chains swiftly followed by social order) that conventional wisdom says this sort of thing should. At least in places where COVID has been largely suppressed now, the second time round shouldn’t be as economically shocking as the first; there’ll be way more focus on the test-and-trace approach that we just weren’t set up for in February. I would be somewhat worried about places where it was never really suppressed when it spikes again, though.

tathougies 6y ago
Conventional wisdom says that the market will adapt if there is a reasonable hope that this is truly temporary. I dunno about you but my family all believed that the stimulus was fine and it would work out but only because this is expected to be one time and temporary.. Making this permanent or even dragging it out would have severe economic consequences

sandworm101 6y ago

Viruses tend to get less deadly over time. There are scientific reasons for this (ie the people most in danger die off earlier, or social adaptations favour spread by more benign strains over the killers). I expect the second wave to be more widespread but result in fewer deaths. The economic impact is more dependent on how we handle the crisis. If we handle it badly, ie how we are now, it will be worse than if we take the more mature approach.

DuskStar 6y ago
Well... Both of those causes are bought with lives. So by reducing the number of cases and deaths, we may also have reduced the amount that the virus has attenuated.
- sandworm101 6y ago
  When it comes to disease, all progress is bought with lives. We learn by our mistakes, at least we should. Those mistakes do mean dead people. But we still have to act.

lefrenchy 6y ago

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

eloff 6y ago
The question is, was this a free lunch then, or will it be paid for via inflation?
- lefrenchy 6y ago
  Yeah, I accidentally left that out of my comment. I agree though, inflation is what we need to be careful of. I don’t like the rhetoric that we will need to pay it back in taxes though because I find it misleading. The real is inflation, not some debt to be paid.
- cheerlessbog 6y ago
  Inflation is too much demand chasing too little supply. If the money printing simply replaced missing demand, should we expect any inflation?
  - jackcosgrove 6y ago
    If demand stayed constant while supply decreased because fewer people were working, yes I would expect inflation.
  - eloff 6y ago
    I think that's too simplistic. If it were true you could just print your way out of any down turn with no consequences. Crazily enough there is a mainstream view in macroeconomics that you can do just that. I think people aren't stupid though. If suddenly there are more dollars, then a dollar should be worth less. Hence inflation.
anoncareer0212 6y ago

deleted 6y ago

[deleted]

twblalock 6y ago

We will also pay for it in cuts to social services, especially at the state and municipal levels, unless we raise taxes to pay for those too.