The COVID-19 coronavirus is very challenging because the majority of those infected will feel only minor symptoms, or none at all. It is an invisible lethal enemy.
A few weeks ago we were living our usual lives. Now, things we took as normal are no longer possible, for instance: an evening with friends, daily commute, a plane flight home, conversations at our favorite coffee shop, dinner out, the list is endless.
Daily reports of increasing infections and deaths across the world raise anxiety levels, and in cases of personal loss comes grief.
There is stress and caution about tomorrow, about the health and safety of our families, friends, and loved ones, and about our ability to live the live we have enjoyed of decades.
In addition to the concern about the impact on human life, there is fear about the severe economic downturn that may/could/will result from a prolonged war with the COVID-19 coronavirus.
Businesses are closing, people are losing their jobs. We are locked down Vs and invisible enemy, we must find a solution. Sacrifices seem novel now, but 12 weeks out, well that will be a different story.
During WWII we all sacrificed knowing what, who and where we were fighting. People were working, fighting and dying for freedom. This is not the same.
The Big Q: Why is this crucial?
The Big A: Because the shock to our lives and livelihoods from the world wide virus conquering efforts could well be the biggest on record.
In the US, Canada, UK, EU, Australia, NZ, India, China (where 1.7-B people) + the rest of the world, the government ordered lockdowns of the people and other efforts to control the virus will likely to lead to the largest Quarterly decline in economic activity since Y 1933.
Never in our history has anyone suggested that people not work, that countries stay at home, and that we keep a safe distance from 1 another aka social distancing. This is not about GDPs or the economies, this is about our lives and livelihoods.
We are seeing Herculean energy focused suppressing this virus. We also see enormous energy go into stabilizing economies through public-policy responses. But, to avoid permanent damage to our livelihoods, we need to find the way to bring this terrible event to a halt, to suppress the virus and shorten the duration of the economic shock, and we must do both poste haste!
To solve the virus and the economy crisis, people must establish behavior patterns that slow, stop the rapid spread of this virus, and work towards a prime goal where most people return to work, to family duties, and to social lives.
Daily we learn more about what happens during a lockdowns like are mandated in China, Italy, across Europe and the United States,
Economic activity dives deeper than any of us have experienced. People shop only for essentials, people do not travel, people do not buy automobiles, people do not work!
The latest estimate that I read Monday, is that 50% of discretionary consumer spending might not happen.
In a recession, people cut back on durable goods purchases that can easily be postponed, they increase saving in anticipation of a worsening crisis.
The coronavirus pandemic is not a recession, it is different, it is a lesson in survival, as people will flat eliminate spending for restaurants, travel, and other services that usually decline, but do not fall to Zero.
A 50% decline in discretionary spending translates to a 10% reduction in GDP, that without considering the 2nd and 3rd-order effects in the supply chain. It is unprecedented in modern time, it has been unimaginable, until now.
The longer a lockdown lasts, the worse the impact on us.
To visualize what this means for people in lockdown areas, imagine chefs (I know a few) whose restaurants have been forced to close, and grounded flight attendants, their planes parked at the airports for months, Sunday Singapore Air grounded it entire fleet.
And with 25% of US households living from paycheck to paycheck, and 40% of Americans unable to cover an unexpected expense of $400 without borrowing, the impact of extended lockdowns millions of people will catastrophic.
And there is this: Can we accept that the pandemic will overwhelm our healthcare system, and thousands, if not millions, will die.
More Big Q’s: Could the answer be that we cause even greater human suffering by permanently damaging our economy? Can the world work fast to control the virus, soften the inevitable economic crisis to sustainable levels, and safeguard our lives and livelihoods?
The Answer will come in time…President Trump says he intends to reopen country in weeks, not months.
Have a healthy day, stay at home!
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