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US President Donald Trump has signed a $2,000,000,000,000 stimulus bill, along with many other leaders in their respective nations
This thread is a follow-up to the oil prices thread we had less than a month ago.
Australia has signed a stimulus package
So has the US (title) (link)
And Brazil (in portuguese)
So how are we feeling about this? Will the packages do their jobs and bandage the economy together until we stop the virus, are we headed towards a new great recession/depression, is this the nail in the coffin for the US as a political power (China has the virus under control in their nation and they're selling/giving out tons of masks so if the US economy is nuked and the Chinese only feel the trade effects then they can further empower themselves)
I don't think anyone can claim to be an expert in predicting the future at this point, so everyone's opinions are somewhat valid (perhaps to our collective chagrin when Trump claims we'll be over this in a matter of weeks).
That being said, I think Canada had a better plan to provide monthly payments, which will be much more important in the later months of the pandemic as second order effects start to show their face. A single check will help those in need today, but what about a month from now? Those people still need to eat and there are no indicators they will be back at work in April/May...so what do we do then? I think it's short sighted to only account for a single month of need, and we'll see the government squabbling over how to save the economy in just about one month from now.
How does this play into international politics? It's tough to say. Most nations are going to be quarantined/isolated for the foreseeable future, lest they allow the pandemic to spread all over again, so I don't know if countries will truly get a leg up since this is a global issue that creates dependencies on other countries to solve their internal spread first.
So the single check for $1200 per adult + $500 per child is only one aspect of this. And it is given to people making under $75k-99k/year, generally lower income people who might be struggling paycheck to paycheck.
The second aspect is added $600/week to Unemployment insurance. So either you are essential personnel and still collecting a pay check or you got laid off temporarily and will receive a minimum $15/hour wage (15x40=600) + half of your average paycheck from tax returns in 2018. That's at least $3600 for this first month and another $2400 a month after the first for a single working age adult with no kids. This seems reasonable to me that people would be able to keep up with a majority of their bills during this.
That's a valid strategy. I'm doing something different. I'm focussing on the big-picture issues because the personal details frighten the hell out of me. The small details involve people getting sick, people going to hospital, people dying. I know people (as everyone does) who are at high risk of complications and even death if they catch this virus (one person I know will almost certainly die if they get this virus). I can't dwell on that. I need to distract myself with other issues. I prefer to read about business closures and stimulus packages because they're not as personal and they're not as scary.
An important part of social distancing and lockdowns is to turn large parts of the economy off. Everything other than "essential services" and work-from-home activity shuts down. You might consider it a deliberately induced recession. The horrific economic results show that the public health measures are working, because people have stopped working.
A stimulus bill can't cause a recovery under these circumstances; if it did it would be undoing the public health measures. The main point of it is to make sure that the "essential" parts of the economy keep going and serve the people who are deliberately made idle, even though they can't do much in return. Also, we want to preserve what we can of the inactive, "inessential" businesses for later.
In the recovery phase, we will try to turn everything back on again. Hopefully the starter will work, and businesses will be able to recover from hibernation. Or, failing that, people will start new businesses to do all the things the old ones used to do.
The scale of it all is pretty incredible.
While I realize this has a snowballs chance in hell of happening, I would love to see this as a chance to consolidate and trim the fat of the current corporate sprawl. Have the unemployed return to jobs that will improve society. Things like building affordable housing, repairing bridges/roads/sidewalks, improving public transport, install public art, planting trees, and enlarging local farms.
I would quit my job in a heartbeat if I could make the same living working a farm. It's a hell of a lot more important, ane it's a travesty that farm workers make a fraction of what I do.
You may get your wish. There was an article I saw sometime this week remarking on how all the migrants who annually come up from Mexico right about now (March) to start working on farms all across the US are behind denied entry because of the pandemic. And even if they loosen up around border crossings in the next month I think there's still going to be a labor shortage in agriculture this year. Which is going to do interesting things economically. One possible outcome is that the pay goes up, and Americans who have been out of work for several months start thinking that field work doesn't sound so bad.
Mildly offtopic but blue-collar workers like construction workers and farmers who do this kind of stuff are disproportionally conservative. Funny how that works out.
On a more serious note maybe it's just me but I would be surprised if a majority of people just went along with that. Farming and road-building tends to be long, hard work and that's why it's mostly automated in places like the US.
Road building definitely isn't automated at all. Industrial farming is a major contributor to global warming, and returning to sustainable local farming is a must.
And the degree to which non-grain crops is automated is also vastly overstated. Many farms rely on illegal immigrants to pick crops at below minimum wage.
Well, corn and grain are. Harvesting vegetables is not and depends on migrant labor.
No. There is nothing that will save the economy. Jobs have already been lost, and will continue to be lost. Companies have already closed and will continue to close. Trade is already falling and will continue to fall. The packages are just there to soften the blow. As the Australian government puts it, they’re trying to hold everything together so we can recover later (they’re even starting to talk about their third stimulus package, and framing it as something to help put the economy into hibernation).
Think of the stimulus packages as an intravenous drip for a patient that’s slipping into a coma. All we’re trying to do is keep the patient’s metabolism running at the bare minimum to sustain life, until the disease works itself out of their system. We can’t stop the patient getting sick, but we can probably make its recovery slightly easier.
Every western country’s economy is going into intensive care as we speak. All we can do is cross our fingers and hope they survive the next 6-12 months. Like COVID-19 itself, most will survive, but some won’t. And, also like COVID-19, even after the worst has passed, it will take longer to recover from the disease than the length of the disease itself.
Absolutely, totally, yes. It’s unavoidable. It’s already inevitable. Unless Donald Trump gets his apocalyptic wish to re-open the USA for business by Easter, the US economy will falter. And, seeing as no other country is aiming for a Trumpian health apocalypse, their economies will also falter. Governments are planning for it.
Even if the entire western world followed Trump’s apocalyptic vision and restored full business tomorrow, that wouldn’t help. It might save the economy in the short term, but not the long term - because there is no cure for the coronavirus. Even if we don’t shut down the economy ourselves, the pandemic will do it for us. It’s coming for everybody, regardless. All we get to choose is how to possibly soften the blow.
We may not end up in a years-long depression, but it’ll certainly be a recession lasting more than a year.
As I’ve been reading about the effects of the coronavirus pandemic, I’ve been vaguely reminded of the Black Plague in Europe. It killed a third of the population, and entirely changed the social and economic structure of European civilisation. As just one of many effects, it eliminated feudalism and sowed the seeds that later became capitalism. COVID-19 won’t have quite as big effect on us as the Black Plague had on Middle Ages Europe, but it will be a significant event in human history.
As if Donald Trump wasn’t already that final nail in the coffin? As if China’s economic rise wasn’t already that final nail? As if another one was needed?
This statement only holds true as long as the economy is in the gutter. There will indeed be something to recover the economy, whether it be military/industrial production (à la WWII defense post-depression) or (imho) legitimate innovation and production of value. There's too much inertia for the economy to just throw its arms up in the air and give up. The current downturn is the assumption that everyone else is going to lay low while the world turns around them...we've yet to see the world where stocks turn upside down in a panic. That being said, the timeline to recovery is unknown, and I am willing to bet it's over a year from now.
I think this is basically guaranteed at this point. The question yet unanswered is how long, which I don't believe there is a single expert opinion to rely on at the moment. My guess/assumption/preparedness is that in July we will see an element of "normalcy" but it will cause an infection uptick that causes Quarantine 2: Electric Chat Boogaloo.
Will jobs shift? Of course. Will people go back to normal? We live in the wake of the Black Plague, H1N1, HIV, etc...I think this will be temporary as well (but that shouldn't be comforting). It's the actions we take now that define us.
From what I can predict, most countries will employ a period of isolationism, which will cause them to realize their reliance on foreign supplies is unsustainable in times of need (I doubt the US will come to the same conclusion). Whether this leads to an increase in national/social industrialization of essential services is yet to be seen (the US seems dead-set on private healthcare), but an economic contraction will force every economy to make sure it's counting what matters.
I see I need to clarify that statement. "There is nothing that will save the economy from the forthcoming downturn that Kuromantis is asking about." Of course the economy will come back afterwards. It always does. But Kuromantis is asking if the current stimulus packages around the world will save the economy from the effects of the coronavirus pandemic - and the answer to that question is, no, they won't. This recession is coming and there's nothing we can do to stop it.
Not really. Trump is really misusing and fucking up the power he has and tearing-down much needed government agencies but any future president could still reform them, if it took the senate and a year or 2. If the US is stripped of a quarter or something like that of it's income from workers in recession then I wouldn't be surprised if the US didn't go into Greek austerity measures that probably make millions of people default on those medical/college bills and if China could show itself to be OK during that time they could probably trust most of South/SE Asia and Latin America to fully hand themselves over to them when it comes to trade and leave the now Weimar-like and increasingly isolated US to it's increasingly radical devices.
Not if, as expected, Trump gets a second term. The USA's international reputation might recover from 4 years of him, but probably not 8 years of him. The world is already working around the USA, after only a few years of Trump's presidency. After 8 years, it'll be a long-standing habit to work around the USA. (And it's not like the USA was the best international citizen even before Trump came along.)
China was already on track to become the biggest economy in the world, even before the pandemic came along. And, while China was reaching out to make (or buy) friends, the USA was turning inward. The pandemic will be an economic speed-bump for China, but it'll be a brick wall for the USA. The world will be different on the other side of this: China's economic power will have increased and America's power will have decreased. We would have gotten there anyway, but this pandemic is going to get us there faster.
It's only going to accelerate a process that was already underway with President Trump.
China was already going to become economically more powerful than the USA, even before this pandemic turned up. Maybe, under a different President, the USA wouldn't lose quite so much ground economically due to the pandemic, and so wouldn't fall behind China as quickly - but Donald Trump is not that President.
However, China was not destined to become the most influential country in the world. But, under President Trump, the USA was already losing its preeminent position in international society, even before this pandemic. Maybe, under a different President, the USA wouldn't lose quite so much ground politically due to the pandemic, and so would maintain its preeminence over China - but Donald Trump is not that President.
Stopping trade hurts both parties: the seller and the buyer.