The COVID-19 pandemic has had a dramatic impact, period. But it’s worth looking at what kind of impact it’ll have in the near to long term future. It doesn’t look good.
There’s a lot to talk about when it comes to the pandemic’s impact on society at large in the future, but I’m going to focus on the thing that gets more attention than anything else — the economy. At the time of writing this, the markets are actually doing okay in the US. Frankly, it doesn’t make any sense to me. 22 million Americans are now unemployed, first quarter business and loan losses are going to be enormous, and home sales are dramatically decreasing.
Two things: (1) these things do not get fixed overnight, and (2) in light of the economic bleakness, the stock market is significantly inflated. Wall Street seems to be operating in a completely different universe from where it usually operates — it’s no longer losing confidence when it normally would — and it seems like market optimism is being based almost exclusively on the prospects of a vaccine or infection plateau. But the markets simply cannot be reconciled on those things alone. Right now, millions of Americans are seeing what little nest eggs they had whittle to nothing. Many are not being paid as much as they typically would be and many aren’t being paid at all. Food insecurity is exploding.
What does this all amount to? Unfortunately, even if things “get back to normal,” meaning people can go outside and go back to business as usual, the economy is in deep turmoil. According to the International Monetary Fund, we could be looking at the prelude to the biggest economic depression since the 1930s. It pains me to say this, but I fear we haven’t even begun the worst of this. Too many people will be infected, too many people will die, and too many people will become desperately poor.
The pandemic has exposed profound weaknesses in the global economic system to which we’ve become so accustomed. Predicating economic health on infinite growth was never a good idea — mainly because infinite growth is impossible — but now we have to endure the consequences of a catastrophe that struck at the Achilles heel of our system. The default, garbage credit, abysmal purchasing power, debt explosion, restricted trade, inflation, and bailouts are probably coming. Be smart, stay healthy, and responsible.