What will happen in this scenario?

[Caramel81]

If millions lose their jobs and there aren’t enough jobs on the market available for most of them. How do the government expect people to pay bills and mortgages etc long term? I know they have provided generous help for many and they clearly can’t afford to keep extending things like furlough and the SEISS scheme. What do you think will happen as I feel utterly petrified at the state of the economy and it feels like I’m hearing about someone I know losing their job on a daily basis as the moment.

Universal basic income in some form.

But what if that wouldn’t cover the mortgage/rent/bills etc for most families? God knows what else they could do though as they can’t just magic money for us all out of thin air. It’s really scary

That would be the existing benefits system, I would imagine.

Which, yes, is going to see people really struggling, losing their homes etc - just like every previous recession.

The current measures are an attempt to soften the impact on the economy and to support compliance with Lockdown. No-one's going t stay at home if it means not being paid and their kids starving.

It isn't magic it's GDP.

Well, maybe we'll end up with a welfare system that is sufficient to live on, eh?

You know they can literally print more money, right?

Potentially a one off large taxing of people's assets/savings (say a one time 10% payment)

More inheritance tax

Higher income taxes across the board

Lots of reposessions and homelessness - I guess repossessed housing stock is likely to be bought up by landlords and then rented back to people (in many cases paid for by HB, it would make more sense for housing associations/councils to buy up the houses then rent them out but that won't happen...)

Or, if you waht to scare yourself - read The Mandibles.

We live in a capitalist society. When the restrictions lift businesses will reopen, where one has closed down, someone will see an opportunity and open up or expand. Demand will be the same as previous levels, with some deviations. Pent up demand will be high.

Jobs will come back. In the meantime taxes or borrowing will increase to pay the bills.

Universal income.
An improvement to the benefits system.
Higher taxes or a change to the tax system.
They may cut funding elsewhere to pay back what we owe.

But things will bounce back eventually. Shops will re-open. New businesses will pop-up where others have closed. Society has been through economic depressions, pandemics and disasters before. It won't be the end of the world.

It's going to be an extremely tough few years. Austerity + brexit + pandemic = recession if we're lucky, depression if not. Unfortunately we have the most incompetent and venal govt in the history of humankind so don't expect any innovative public purse initiatives/infrastructure spends to encourage economic growth. Plenty of money for Tory donors though.

We had this in the 1980s with a different cause. Eventually some places started to recover, though some have not fully to this day.

The difference is that I think the job losses are likely to be more evenly spread geographically.

It could mobilise socialism so we end up in a fairer, balanced country. It needed a seismic change, this could be it.

People will be put on universal credit. They will lose their home (rental or mortgaged) as uc doesn't pay for most mortgages and nowhere near enough for private rental.
They will end up bankrupt as they can't service their debts/bills. Most will end up using food banks due to the subsistence level of benefits and the benefits cap. And then they will get sanctioned and have their uc stopped because they can't afford the Internet access to fulfill their 35h per week of online job search plus the time taken to fill out the uc journal and online job interviews, or because you haven't applied for enough jobs (even though you have applied for every job that you're remotely qualified for).
Why will this happen? because that's how uc is set up .
When enough people are in this position maybe the government will be forced to fix uc and stop hammering the poor but i doubt it because the people on benefits are all "work shy and lazy " right

@Lemonpiano of course they can't do that - that would instantly devalue the pound and we do not live in isolation.
There may be defaults on mortgages etc, but this is not the first financial crisis. I don't know anyone who has lost their job. In fact I'm amazed I don't, people are tightening their belts for sure though. It will be difficult but the financial help given out (funded by increased national debt) will eventually have to be paid back by higher taxes.

Sorry Pip they can and do just print extra money, quantitative easing, they did it during the banking crisis.

We need to raise taxes and overhaul the benefits system

all CallistoSol Wow, have you heard of Venezuela? How do you think you sound when you make such statement.

The OP didn't live through the 1980s I'm guessing.

Massive homelessness and addiction problems, massive increase in DV.

Repossessions. Drop in house prices across the board. Wage stagnation. Poverty. Lots and lots of poverty.

It's so bad that even this venal, right wing government fears the results of a depression. It's so bad they are trying their hardest - according to their lights - to stave off economic collapse. Believe me, if this government could get away with minimising the shit storm of covid, they would.

Random comment of the day goes to blueangel!

@blueangel19

all CallistoSol Wow, have you heard of Venezuela? How do you think you sound when you make such statement.

Yes I am aware of the economic collapse and continuing situation in Venezuela. What is your point?

As in every other recession, lots of people will use up their savings and lose their homes. The housing market will crash, which won’t result in more people being able to buy because a) no one will be able to afford the deposit if banks get even stricter about loan to value, and b) home owners will be trapped by negative equity.

But Bozo and his mates are rich enough that they’ll be fine regardless, so that’s alright for them

The current measures are to stop entire sections of the economy from being wiped out when they could bounce back when restrictions are lifted. And as PP said, to ensure compliance with restrictions in the meantime. Tbh I think if the government had realised in March that furlough would end up lasting a year, they would have made it a lot less generous.

It's going to be bad but there is an opportunity.
Sadly it would take a miracle for any serious oppos so the poor will pay and the poorest will pay most.
People will forget that society shored us up in the crisis so there will be no enthusiasm for a more equal system.

In the 80's my boss earned 8x my salary. Now I do the same job for Capita it's 24x.

Oooh what a good question. Let's all remember that some of were asking this question before Covid had ever been thought of, because it was already happening. IT has taken jobs away everywhere and they are not being replaced. There is now also Brexit to worry about, which does not look promising so far.

The fundamental trouble is we can now produce all the substances we need to survive, with some luxuries, using fewer people. There's only two ways we can go from this: either we bring in Universal basic income, or its equivalent in kind, distributing housing, food, clothing and energy for free: or we distribute the means for everyone to produce those things alone.

I tell a lie of course, there is a third, which appears to be what certain richer sections of British society would like: let everyone else but themselves fight for the scraps they can no longer afford until most die.

@MayYouLiveInInterestingTimes that’s what I fear is going to happen!