At the start of the COVID lockdowns, it was clear that the economic pain was going to be real. Certains goods could have expected to be decreased. Yet as the lockdowns became extended and the threat of the virus was expanded, it was clear the initial assessments where wrong. Clearly, the pain was going to be more substantial, and the wider economy was actually threatened. Following the Keynesian script that modern governments seemed married too, the clear solution was to flood money in. Numbers can be made to say certain things with enough effort for a certain amount of time. Reality often does not link to those numbers when government funding gets involved.
Governments do not need much encouragement in the modern age to spend other peoples money. So when it became clear that the lockdowns and the pandemic itself were going to cause immense scale damage across the entire globe, this was seen as a sign for often unprecedented government actions. Discussion and debate about what the money was being spent on and if this was even the right decision were put on hold. In a time of crisis, these could not be expected, and planning had to be quick or non-existant. This flood of money did save jobs, although I have my doubts if a report will even be started on what it actually did until decades later. Innumerable projects and policies in the western world alone were started. Normally to create such a large shift of money from the public purse to the private taxes would be cut to allow natural spending to make those choices. For the most part, the government has funded an economic pause button or picked winners.
Individuals Under Water:
While the focus on empty malls or downtowns is important, the individuals in society are also under attack. Freedom of movement and association have been limited, and the impacts on peoples health can only be speculated about. Jobs have been lost or hours reduced, placing people under economic strain. Retirement savings have become riskier. The housing market has once again started to rock. After the lockdowns are lifted numerous individuals are going to come out of this much worse in real measurements, then when they entered it. Personally, I wonder the time cost of people thinking about COVID or other elements and what that will do to people.
Hopes of more training and people picking up new skills may capture the medias focus. However, while that might be easier to the right about or make the cost of actions seem less, it creates a false impression about the damage. As we leave the pause button that governments have funded the impacts on individuals will become more apparent. If people find the photos of empty malls and CBD’s too confronting then when images of human suffering are eventually allowed onto the news, then I wonder how they will cope. As much as idealists may wish that their actions did not have consequences, COVID has not stopped reality.
Stealing From The Future:
Hitting the economic pause button is very expensive. Wages have been funded along with other costs. This is being paid with an immense amount of government debt. It is the most obvious way that the future is It is being taken from for the present. These will have to be paid off, or the interest payments will also be something that needs to be dealt with. For countries that are not the bedrock currency, these debts are going to bite a bit more although a look at American cities under large amounts of debts should be a warning to US readers. However, this is not the only cost of hitting the pause and locking everything down.
Logically it is impossible to deny that some bad companies that would have gone under have been allowed to continue. Some have been able to keep getting loans or have not been closed due to government action. They continue to hold onto capital both human and otherwise and act as a deadweight on the recovery. The ideas and new businesses that would have been launched are a hidden cost that will be felt from the future. With most current business’s having serious trouble, the line of credit and confidence to find startups has mostly evaporated like many peoples motivations to start them.
Cost Printed In Lies:
Inflation is something that has been moved away from mainstream reporting. However, the loss of value of money is not something that can be hidden away. The Federal Reserve has given up trying to limit inflation and even made a public statement about this. Across the world devaluing the currency of regular people is occurring. Some of this has been hidden with the drops in the value of other assets and frozen prices during the pandemic. If people wonder why the middle class and working class are losing power, then they need to look no further then the fact that most people will complain about taxes on the poor but not inflation that destroys value.
Destroyed motivations to understand the systems around us are also a crucial problem. People are jumping on trends with their money without much research and only little logical reasoning. As we try and rebuild the fact that people lack the attention to process what is going around them is a massive problem. Crucial bailouts are likely going to occur. Large scale money movement is also to be expected. Already major institutions have noted that this is the perfect time to create massive scale change. Climate change is often the most cited reason. However, other causes see a chance to push changes that would have been unthinkable. A people that are stressed and overwhelmed are easier to get past then one that is encouraged to think and act carefully.
At the moment many people have jokingly say that it feels awfully good for the economic times and wider times that we are in. A major reason that this can happen is due to the fact that a massive pause button was created. Also, despite this year going very quick, it still has not been a full year since this has started. The economic tide is coming in and pretending that it never will is not going to stop it.