To think that the economy won't just bounce back in three months?

[CloudsCanLookLikeSheep]

I am really worried about the long term effects of all this on the economy. BJ has sugarcoated it saying things will just bounce back when this is over and people start getting back to normal life. I think that's overly optimistic in the extreme. The normal flow of money has been seriously disrupted. Even those furloughed will be on 80% of pay not 100% and most people will be wary of spending on anything more than essentials during these uncertain times.

There may not be 'systemic' issues in the economy at the start but there sure will be in a few months time .Many people will default on debts and bills. Many companies will go out of business and it's all a big chain reaction.

We've never dealt with anything like this before in modern times, even during the spanish flu pandemic businesses weren't disrupted like this as there wasn't a welfare state so people had to keep earning.

I think the economic impact will take years to recover from and there will be no bounce back recovery, AIBU?

It will take a decade to get back to anywhere NEAR normal. Possible two decades if lockdown goes on longer than the 3-6 weeks we are expecting.

Really? 20 years for people to bounce back. Humans are far more resilient and creative than that. The economy will be flat for a few years no doubt but for every business that folds a new one will pop up. For every uni degree that becomes irrelevant a different one will be created. There will always be winners n losers in this. Doing things differently will soon become the new normal.

Bold fail on the top paragraph

@cushioncovers Now THIS is the kind of filling people with false hope thing I am on about. No way is the country (or the rest of the world) going to 'bounce back quickly' in the manner you describe.

Maybe 20 years is a bit of an over-statement, but 10 years of recession after this is certainly possible. Your fantastical post is a lot less likely than my thoughts of what will happen.

@Chillyourbeans Couldn't agree more!

I think some sectors of the economy will never recover, retail and the licensed trade, for example.

So many high street names (eg Debenhams, W H Smith) were struggling already that I can't see them coming back from this. Pubs in rural areas and small towns were barely scraping by, a few weeks of no income while having to pay rent will see many go under. Areas that are heavily dependent on tourism will struggle if people are unable to go on holiday this summer because of restrictions due to CV.

I think the housing market will be hit and some may find themselves in negative equity. If interest rates rise, we could see repossessions rising again. And when the housing market is in the doldrums, other sectors (construction, DIY, furnishing) also suffer, as no-one is spending money on their homes.

All economic contraction increases unemployment to an extent. What will be critical will be whether the government is prepared to raise taxes and spend to mitigate these effects. We might see a return to Keynesian economics whereby the government borrowns and taxes are raised so that "public" money is used on projects that increase employment, and keep money sloshing round the system.

It's not going to be pretty, that's for sure, but it's hard to say just how ugly things might get.

@anotherlittlechicken

@cushioncovers was talking about a 3-6 week lockdown, @Chillyourbeans said a 'prolonged' lock down. And is weighing up whether a long lock down would actually be worth it.

Both would have very different after effects.

I knows it's hard to not spiral and think the worse (today is low day for me) but we have to be positive, if we can't even look forward to life after this then what is the point?

Slight tangent but interesting thread

I think some people’s coping mechanism is to be positive, and when others are negative that impacts how they are able to cope

Others coping mechanism is to be negative, talk about the worst case, and positive people impact their way of coping

The best comparison to this is the 1918 flu pandemic. This killed tens of millions worldwide and over 200,000 in the UK (deathrate is estimated at 10-20 %). The pandemic lasted 2 years and hit the UK in several waves. The virus mutated and by the end was killing people in a matter of hours.

The impact on the economy was relatively small and there's some evidence from the US that suggest the earlier a city was put in lockdown and longer it was in lockdown the less the impact on the local economy. Anyone remember learning about the great depression of 1918 to 1928? Itdidn't happen. This virus is affecting a different age group and the world economy is more complicated but it's interesting to see the best comparison we have.

The best comparison to this is the 1918 flu pandemic. This killed tens of millions worldwide and over 200,000 in the UK (deathrate is estimated at 10-20 %). The pandemic lasted 2 years and hit the UK in several waves. The virus mutated and by the end was killing people in a matter of hours.

Not really, you must factor in the war as well.

Which pandemic do you think is a better comparison? The various cycles of the plague in the 14th century or 17th century?

The flu pandemic killed twice as many people as WW1, the war will have had an impact on the economy but the impact of the pandemic would have been greater.

I don't know, sorry if that came across as a criticism, it wasn't meant to be.

I just think that the war and the deaths and material devastation connected to it must have been a big factor as well.

I know it's not the done thing during these times but I'm quite worried. The economy was only very recently showing signs of a recovery from the crash & we can't slash interest rates this time. That's not to say preservation of life isn't important of course it is but I'm anxious about what happens after.

I also don't think the burden should be on income tax payers, we need to look at wealth too.

Our future will turn on whether we have a govt. that wants to get 'back' to some pre-COVID nirvana, or one that wants to move forward towards a new world without commuters, private cars or business travel. Third runway or grass over Hounslow Heath and make it a nature reserve.

@whiskybysidedoor

Congratulations. Broken clock blah blah.

Sorry, based on what knowledge of me?

I had never started a Preppers thread or been any kind of prepper before this one so do fuck off with your incorrect assumptions.

I just think that the war and the deaths and material devastation connected to it must have been a big factor as well.

Yes, of course. The demobilisation of the troops contributed to the spread, the wartime censorship is why it's called Spanish flu (only Spain had a free press and were allowed to report it), the starvation across Europe caused by the war may have contributed to the flu's deathrate (although that's difficult to say for certain, Spanish flu was unusual that it mainly killed young adults).

Economically I guess we need to compare the impacts of WW1 and WW2 on the world economy to try and tease out the effects of war vs pandemic in the 1920s but the world reacted differently after WW2, e.g. there was a massive injection of cash into Europe from America in the form of the Marshall Plan from 1948 to 1952 whereas in the 1920s Germany had massive reparations to pay.

Good article

www.google.co.uk/amp/s/hbr.org/amp/2020/03/understanding-the-economic-shock-of-coronavirus

Boris can’t tell the truth because the truth is more frightening than we can imagine .

@Purpletigers what are you basing that on?

Would you disappointed if this all turned out to be not a total disaster?

Great swathes of industry were not shut down overnight in the spanish flu pandemic.
If you could work, you did as otherwise you wouldn't eat. There was no welfare state, no 80% of pay whilst you were laid off.

We won’t have the huge economic package Europe had after WWII, But we won’t have the material damage and the huge death toll from the wars and the death toll from the Spanish Flu.

We also were prepared. Sort off, and the governments took some precautionary economic measures.

Then again, everything is so interconnected, recession will hit everywhere at the same time.

I hope the impact can be lessened, otherwise we’re fucked.

I think there are a lot of people living in fantasy land that think we will all be back to normal in a couple of years

Of course the country won’t bounce back in 3 months, probably not even 3 years, but I really haven’t heard anyone in the UK govt. say that it will. I don’t think BJ is sugarcoating anything, he has tried to be upbeat but I think he has to, in the same way adults try not to alarm children too much. If he’d been allowed to implement a herd immunity policy (that apparently wasn’t a policy) then things might be different. But then we’d get people saying the govt are happy for people to die and should be doing what Italy and Spain are doing. He’s between a rock and a hard place, just like leaders in other countries are. Not helped by scientists giving wildly fluctuating outcome figures. The future will be different, but we might bring more manufacturing into the UK after this. I do think that we’re all going to have to get used to paying more for clothes and electronics, etc. and not rely on China for cheap products.

There was no welfare state, no 80% of pay whilst you were laid off.

The welfare state wasn't a postc1945 invention, it built on the raft og pre-WW1 welfare reforms introduced by the Liberal party. It was nowhere near as comprehensive, but important developments like pensions, labour exchanges and free school meals date from this period.

I think there are a lot of people living in fantasy land that think we will all be back to normal in a couple of years

Things is, no one here knows how it is going to pan out. Everyone is suddenly acting like they're experts in macroeconomics and epidemiology. The simple truth is: we don't know.

I think there will be some business echoes who chi will take a very long time to recover. For example, I think anyone investing in commercial property for the foreseeable future will lose a lot of money.

A lot of the shiny offices in cities will have been built on the basis of particular working patterns which are less likely to exist afterwards, now that rapid and essential upgrades in It infrastructure have been made to allow people to work from home.

I think there will be a lot less business travel - again, it will be a less justifiable expense so fewer conferences and jollies jetting round the world for mid ranking politicians and execs.

I think with normal retail and restaurant if businesses can survive at the moment without completely trashing their reputations, they'll be very well placed to take advantage afterwards.