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?

We won't just bounce back.

Worrying the number of people who are totally oblivious, my FB full of people publicly promising to continue their patronage of small local business come-what-may. They don't appear to be seeing that they'll not be able to afford to do that in the same way in future. There seems to be a sense that the financial impact isn't going to affect them because they're still being paid now, or that they will be allowed to do their bit and distribute wealth simply by patronising others - it doesn't occur that it'll be taxed from them for govt to decide how to spend it.

I agree that in very short term it's right to keep paying cleaners, nurseries etc but I think it's also important to level with them that it assumes that the family financial circumstances don't change significantly. I certainly wouldn't publicly promise to continue patronage indefinitely.

I find the 'something good will come of this' utterly terrifying. The woke youngsters really support this lockdown. It's their new normal and they think it's doing great things for the planet.

I also think it's prime time to consider NIC on unearned income such as dividends, property rentals, pensions

Most of these are funded with post-tax income so definitely should be taxed way lower than workers. Otherwise why put your savings in these schemes, which are risky and don’t necessarily guarantee an income?

Worrying the number of people who are totally oblivious, my FB full of people publicly promising to continue their patronage of small local business come-what-may. They don't appear to be seeing that they'll not be able to afford to do that in the same way in future. There seems to be a sense that the financial impact isn't going to affect them because they're still being paid now, or that they will be allowed to do their bit and distribute wealth simply by patronising others - it doesn't occur that it'll be taxed from them for govt to decide how to spend it.

To say nothing of the fact that the small business may well go under. We're just getting started.

I find the 'something good will come of this' utterly terrifying. The woke youngsters really support this lockdown. It's their new normal and they think it's doing great things for the planet

Me too. It won’t look so good when companies go completely broke and people go hungry. I don’t think it will happen this time, but it is scary people
are seeing a silver lining here.

That tat in stores is a livelihood for so many people; we should encourage people to buy better, sure. But maybe it means less importing cheap crap from Asia and more making it domestically or sourcing from the EU, which will have higher production standards and employ locals.

That said, Japan and Taiwan both make higher-end products now, so no reason that China can’t up their game a bit.

Yes I am extremely worried about the short and long term implications. Bizarrely I think hospitality might do ok as people will be desperate to eat out again!

But I think the impact of this will reverberate for decades. Perhaps generations. Maybe some good will come out. Yes, the days of flying for a meeting are over. We do need to realise what a simple life means.

But I also agree about deaths from other reasons - I agree these will outstrip any the virus caused.

It’s not the way I would have handled it. It was utterly clear when we saw this virus could spread, without symptoms, it would be different. Had we prevented foreign travel in and out of the U.K. from February we could have contained this. We are an island! We slept walked in. I’m furiousl

I also worry about the future of the EU. When the crunch came, it was every country for itself. And going forward, spain and Italy will need their own fiscal policies.

They will have to walk away and start again

More people will die as in indirect result of the long term economic fall out than will die of Coronavirus. The difference will be that the deaths will be spread out and we won't have daily counts from the media.

The phrase rock and a hard place springs to mind.

To say nothing of the fact that the small business may well go under. We're just getting started.

Exactly. There was a trend in this area about a fortnight ago with service businesses in particular (hairdressers, nail technicians, dog walkers, ironing services etc) offering discounted vouchers for redemption next year (buy a £50 voucher now for £40 type thing), and many people bought them.

Some will doubtless have bought to give their regular provider some extra cash whilst maintaining their dignity but I suspect many others got caught up in 'support local businesses' stampede before it even became clear what their own job situation might be - I wonder how many regret it already. I suspect that next year when some of these businesses are no longer trading (or are, just, and can't afford to 'repay' all this work) there'll be nastiness as the people who really did buy in expectation of the service being delivered discover their voucher is worthless. Of course this may be the least of their worries by then!

I think we can look forward to 50 years of austerity

I also worry about the future of the EU. When the crunch came, it was every country for itself. And going forward, spain and Italy will need their own fiscal policies.

Quite. The future of the EU has never been less certain. As we know, they have rested their future on tighter integration and it has become entirely impossible now because their fiscal policies absolutely cannot converge.

I am so worried about the level of debt a lot of us will emerge from this with. I know the government are trying to help, but my partner is self employed (he has only been self employed 3 years and his first 2 didn’t make much money so we won’t get much) and I am on 80% pay. We will HAVE to pay some bills on the credit card. Also having to spend more on food as the choice isn’t there any more. This is just our story but I know others with 0 income now. I realise they had no choice, but we (and our children) will be suffering with the economic effects of this for years to come.

This is a good thread

I also agree that the long term pain will far exceed the Medium term pain

BUT ethically , this is highly unusual in that it impacts the health care workers who care for the sick . I think as awful as the lockdown is for the economy , if we are not seen to try and protect the health care sector then we really have no hope

I think that’s the crux of the matter over and above the normal fatalities . How can we ask them to care for us if we don’t care for them

BUT ethically , this is highly unusual in that it impacts the health care workers who care for the sick . I think as awful as the lockdown is for the economy , if we are not seen to try and protect the health care sector then we really have no hope

I agree it's ethically dodgy to saddle the frontline with an elevated risk, but this is usually managed via hazard pay.

The public sector inc NHS, schools, councils, social security, pensions will all be cut 10-20% to cover the cost of all of this.

It won’t be the billionaires who pay.

People will be dying for decades to come from the indirect effects of these cuts.

It won’t be the billionaires who pay.

I would imagine that a lot of millionaires are re-organising their finances right now.

‘Life will never be the same again’ is an odd thing to say. Unless you are psychic no-one on here (or anywhere!) can tell what life will be like in 5, 10, 20, 50 years time!

We’ve been through recessions before. There’s no underlying cause or problem for this one. If things go back to normal there probably will be a period of pain, sure, but if trade starts booming and good policies are in place there’s no reason why in a few years the British economy couldn’t be booming. Not saying it will happen (because I’m not arrogant enough to do use that word like I’m some kind of soothsayer, unlike some on here) but it could.

People's mindset does change though, during the 08 crash I was young & fortunately I was not affecting directly at the time. Nonetheless I completely changed the way I shopped for fashion which many did & one reason why they high street has really struggled since. People switched to spending their money on experiences eg travel & eating out, I want be rushing back to spend money on that now.

I won't not want

We’ve been through recessions before. There’s no underlying cause or problem for this one

Thousands of businesses going bust overnight and defaulting on whatever debts they have is not a problem?
Millions of people getting 4/5 pay for an extended period of time is not a problem?
That's not to mention those who have lost their jobs - unemployment set to double.
Just because there was no problem in the economy at the start, does not mean there will not be by the end.

Everyone said the same after Brexit but the stock market and many businesses were thriving!

The economy has taken a massive hit and the way we spend our money will change forever. I think we'll focus our spending more in the UK - holidays, groceries, local businesses. And that's not necessarily a bad thing.

A lot of people will keep their jobs and are currently saving money. It might not be so bad.

‘Life will never be the same again’ is an odd thing to say. Unless you are psychic no-one on here (or anywhere!) can tell what life will be like in 5, 10, 20, 50 years time!

Life did change forever after 9.11, and not for the better.

In NYC, we had the undying devotion to the truly heroic first responders which was lattery transferred onto the armed forces, a terrified public willing to accept any infringement on their liberties in return for security, and a painfully expensive exercise that was subsequently revealed to be farcical (the Iraq war, of course).

It's deja vu all over again.

Everyone said the same after Brexit but the stock market and many businesses were thriving

Brexit hasn't really happened yet, it all continues as normal due to the transition period. The stock market was up due to the certainty it was happening rather than the uncertainty caused by the previous round of extensions.

Many businesses were also not thriving. FlyBe went bust and many others are still teetering on the edge.

Everyone said the same after Brexit but the stock market and many businesses were thriving

Everyone? No.

In NYC, we had the undying devotion to the truly heroic first responders which was lattery transferred onto the armed forces, a terrified public willing to accept any infringement on their liberties in return for security, and a painfully expensive exercise that was subsequently revealed to be farcical (the Iraq war, of course).

Oh, and an absolutely hysterical press.