COVID-19 - damage to the economy

[HildegardeCrowe]

Is anyone else concerned about the economy and how lockdown can’t be extended indefinitely, not least because of the catastrophic affect it would have on people’s finances? I feel so badly for the ones whose businesses have gone under or are staring into the abyss.

We’re likely to see a drastic 13% reduction in GDP, which is the worst figure since the depression in 1921 which was 21%. The chancellor appears to be at loggerheads with Matt Hancock over how we come out of lockdown. Is a potential extended lockdown worth it when one considers the impact on society because it would ravage the economy? Any economists out there for an expert opinion?

Of course people are concerned. Who wouldn’t be?

The depression will be the killer, not the 'virus'.

I keep seeing something about something falling more than 6.4% would mean we would need to get back to work? I may have got they wrong

That’s what’s so worrying mindproject

I’ve been listening to the BBC podcast that floated all the info globally each day into 30 mins. They were saying yesterday that the world bank had put together a ‘war’ fund of trillions of pounds to stop the world going bankrupt effectively.

This is a global recession/depression. Even China will be affected of no one has the money to buy their goods.

Yes mindproject, you’re absolutely right

Floated? Collates that should have said 😬

@TheCountessatHotelCortez that’s from a report from Bristol Uni. The report in summary says once GDP falls below 6.4% more people will die from the recession that follows then would be saved from Coronavirus by the lockdown.

I agree.

I keep seeing something about something falling more than 6.4% would mean we would need to get back to work? I may have got they wrong

I believe you're referring to a Bristol University economist who wrote a study suggesting that any GDP loss beyond around 6% costs more lives than saved. IIRC the weekly cost of the lockdown is around 1% GDP/week.

Lockdown has a shelf life. Partly because of the economy and partly because people get fatigued after a while and start to ignore it. Natural human behaviour.

Which is why they waited and tried to time it right. I think it will be lifted in 2-3 weeks but then it will be reimposed on and off over the rest of the year, maybe regionally.

There will be huge economic effects of ending lockdown too though. Death rates seem to go up to 5% if health services are overwhelmed. So to get to 80% infected herd immunity we’d be looking at 2.7million deaths. Do you think that wouldn’t cause a massive economic problem (and civil unrest)?

The economic damage is mostly caused by the existence of the virus itself and only marginally affected by in-country policies.

I think a load of people are still in denial about this

Feeling that some people I have spoken to think it will all bounce back after a couple of months

I am self employed have had all my work postponed so for the forseeable will be living from savings which will have a knock on effect

No more un needed or thought about purchases bit more of make do and mend

@ChipotleBlessing where does the figure of 2.7 million come from? Imperial suggested 500k if nothing was done and 250k if we had just carried on with the methods prior to 23 March.

500k assumes that everyone who is ill received treatment. But in reality if we let it run then we wouldn't be able to treat everyone who was ill so the death rate would go up - probably to about 5%.

Yes. I work for a small business and we've had to close so we're all on furlough. My employer said if we have to stay closed for more than 3 months the business won't survive.

There will be a huge economical impact but that’s not necessarily an entirely bad thing.
Less focus on acquiring unnecessary things because it has a certain label, less food wastage and more thought about what we buy, less hedonistic behaviour.
Hopefully, less power to the financiers.

I don't think this has been handled particularly well by Government with regards to testing and especially with the lack of testing for front line NHS staff.

The ramifications of all this will be felt for a long time to come. If proper measures had been taken earlier in the year I strongly believe we wouldn't be in this situation now. Probably a massive percentage of the population stuck at home stressing how they are going to provide for their families and this could've been avoided. Proper measures and testing would ensure those who are free of the virus could carry on and those who test positive or who are high risk could receive the care and support they need and be isolated at home. I fear for the effect on people's mental health if this continues much beyond May/June. The worry is those who do have the virus (and maybe don't know it) will simply become fatigued by the measures (as already mentioned) and will simply start going out as normal.

As if it wasn't hard enough before to manage financially. I also really feel for those stuck indoors in abusive households with no respite from their tormenter and no access to funds or even the means to leave now.

Hopefully, less power to the financiers. Not going to happen.

@Oakmaiden, but Imperial factored into their estimate of 500k health services being overrun and people not therefore being treated.

We won't just bounce back and it will be bad.

However it's not possible to decide not to lockdown because of the economy, you might as well imagine the impact on society of months of NO healthcare. No going to A&E if you have an accident, no specialist care if you have a heart attack or stroke, no cancer treatment, nothing. The impact of letting covid19 just burn through the population would be dwarfed by the deaths from everything else.

@CherryPavlova you do realise that the top 1% of earners pay a third of all the income tax don't you? Where will the money to pay for everything come from if the "financiers" weren't there.

Yes OP, we need to get to a sort of normal very soon now that the health systems are in place (with vulnerable people shielding themselves).
We need to be testing more, testing contacts and isolating individuals and families that are unwell.

They can’t let it run but they can’t lock down too long. I’m sure everyone in government is aware of the tension between the two.

@underneathehash do you think testing will be enough? I just think of London. How does contact tracing work when people travel by train and tube? Often work in offices with hundreds/thousands of people.

@MarshaBradyo agreed. I presume this is why the antibody test is key. If you do a big enough sample the government can work out roughly how many people have had it. This can be compared to how many people died from it (not with it)/need hospitalisation. They can then model much more accurately different lockdown exit strategies.

@strawberryblondestar That 500k was based on a much lower death rate based on Chinese figures. Now we can see from countries around the world what actually happens when health systems are overwhelmed and publish real death rates.