A recent article in CNN poses the question if the economy is heading for a cliff? I believe it is certainly a possibility. I disagreed with shutting down the economy for one reason: Superpowers don’t have the luxury of shutting down their economies because they’re afraid a percentage of their citizens will die.
The painful truth is that superpowers exist only because of their economies and military prowess. It shouldn’t be a surprise to anyone that China, Russia and the United States have the largest militaries and among the largest economies in the world.
The challenge for the U.S. is that it is a nation driven by consumption, not manufacturing. Reduce the ability of Americans to consume and the country quickly falters. We are seeing this today with over 53 million Americans out of work.
What’s frustrating is that shutting down the country did nothing to slow the spread of COVID-19. COVID-19 is a pandemic. A pandemic is an epidemic that travels. When faced with a pandemic like COVID, the most intelligent choice would have been to clearly articulate to every American who is most at-risk along with recommendations for how to avoid catching COVID. I remain incredulous at the fact that when COVID-19 arrived, the media and many so-called “medical experts” argued that masks shouldn’t be worn. Ridiculous.
I’ve read articles that state that COVID-19 is a ‘Black Swan’ event. This is false. History is full of pandemics. The Black Swan event was shutting down the economy.
Retail jobs won’t return as consumers will avoid retail stores.
Many restaurants will never reopen as they don’t have the cash to whether the current storm.
Movie theaters are dead. Do you know anyone who can’t wait to go into a crowded movie theatre to watch a movie?
Mortgage defaults will rapidly increase through 2020 into 2021. Do you remember the housing crash?
Is the economy headed towards a cliff? Yes.