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Originally Posted by redpoint5
My estimation is that this is nearly guaranteed to be much worse than 2008. GDP was down 3% from that "meltdown". We're somewhere around 20% down currently, and we're far from the worst of this disease. Cases are expected to to peak in May, with deaths expected to peak in July. We're likely to see multiple peaking cycles with government mostly keeping us in quarantine but relaxing periodically.
Even if we were somehow able to get back to 100% output next month, we'd have already lost more economic productivity than we did in 2008-2009 on an annualized basis. I started out naively optimistic with this, but now as people build optimism I'm growing in pessimism. Government wouldn't issue shelter in place unless the problem was dire, and in most places we haven't hit dire times yet.
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This has the potential to go either way. Yes, the drop is way deeper than 2008/2009 but so could the rise. It all depends whether we react to this is a coordinated way or not. We must do a nationwide shut down to buy time and stop the spread. If we don't this will roll on and on through the summer and a massive and long lasting recession is all but certain.
I believe we are lucky that this happened early in an election year. It is tool late for politicians to fear a primary challenge and early enough that they have to do something about it because they know they will be judged by the people in 8 months.
The stimulus in 2009 happened after more than a year of steady job loses. Back then congress, fresh off elections and not needing to stand before the voters for another 2 years only managed to scrap together a $0.8 Trillion dollar stimulus and they did very little to put money into the hands of low and middle income families that would spend it. We got a payroll tax cut that gave people a few more bucks a check. We got a $250 check. The unemployed got extended benefits but the checks remained at poverty levels that didn't keep people from losing their homes, cars, and hope. Recovery was slow and steady and it took 3 years for unemployment to get back to the levels before the recession although a lot of people were working jobs that made less than before.
Today people are unemployed because the government told them to go home. All my company's factories in North America are closed but they could open them back up as soon the government gives the all clear. The factories in China are back up and running now that the pandemic has passed and they still have an order book to build.
Congress and the President stand before the voters in 8 months time and they know they will be judged on the economy and what they did for the little guy. In two weeks they put together a $2.2 trillion dollar package with the majority targeted at keeping people above water until they can get back to work. The Republicans that a loath to give the unemployed and poor any money didn't blink at giving every unemployed person an extra $600 a week check and expanding who qualified. The Democrats that hate large corporations signed off on $500 billion to keep them in business with very few strings attached. We have a chance at starting up the country in a few months with most families and businesses still intact. The unemployment check, $1200 checks, and business loans could do that. (A friend of mine with a small business is thinking about use the new loans to expand and refinance to come out of this is better shape then he started)
All of this depends on us getting a national quarantine right and keeping it in place long enough for it to work. That requires the President to take the long view and stay focused. We aren't going to be back to normal on Easter, half the country still has uncontrolled spread. The long game isn't his strong suit but his reelection depends on it so hopefully that is enough and his people can convince him that pain today is worth it.
There will most likely be another spike in the fall, there was in the 1918 flu pandemic. We MUST use this time to get the medical equipment we need, the ventilators, and most importantly a huge number of testing kits ready for the fall. There is no way Trump is going to shut things down again a couple months before election day.
We will have to treat the virus in the fall like South Korea and Singapore handled the first waive. Test everyone that has flu like symptoms. Quarantine those that have COVID 19 and trace everyone they came in contact with and quarantine them. We can't let it get out of hand again so it become necessary to send everyone home.
So I have hope but it is diminished by the President. I would feel a whole lot better with a President Pence in charge today instead of Trump. I would feel WAY better with my personal 2016 choice Kasich in charge. I wonder how many people in the GOP feel the same way and are secretly regretting not taking the chance to get rid of Trump when they could. They will all rise or fall on what Trump does.