Posted on 04/02/2020 11:00:44 AM PDT by USA Conservative
If this government-ordered shutdown continues for much more than another week or two, the human cost of job losses and bankruptcies will exceed what most Americans imagine. This won’t be popular to read in some quarters, but federal and state officials need to start adjusting their anti-virus strategy now to avoid an economic recession that will dwarf the harm from 2008-2009.
Much of the world economy has shuddered to a halt. In the United States alone, a record 3.3 million people filed for unemployment benefits in late March. President Donald Trump once mused about lifting pandemic restrictions by mid-April to prevent more economic damage, but ultimately settled on extending federal advice to maintain physical distancing through the end of April.
Trump’s decision, however, has only put off the question of when, exactly, cities and states should begin to ease up on distancing orders. “If you keep the shutdown going for 2 months more than we need to, that’s just an unbelievably costly mistake.
Grassfire put together their estimate for the costs of the shutdowns related to the coronavirus and the amount is staggering:
1. Loss of Stock Market Valuation
At the end of February, reports indicated the stock market lost $6 trillion in valuation based on a drop of the Dow Jones Average from a high of 29,551 to 25,429 in the first wave of coronavirus crisis slides. Until we find a site that states the total loss due to the coronavirus crisis, based on the $6 trillion slide, we are estimating the total loss as of 3/31 (with the Dow at 18,591) to be:
Stock market loss in valuation: $10.5 TRILLION
1. Loss of Stock Market Valuation
At the end of February, reports indicated the stock market lost $6 trillion in valuation based on a drop of the Dow Jones Average from a high of 29,551 to 25,429 in the first wave of coronavirus crisis slides. Until we find a site that states the total loss due to the coronavirus crisis, based on the $6 trillion slide, we are estimating the total loss as of 3/31 (with the Dow at 18,591) to be:
Stock market loss in valuation: $10.5 TRILLION
2. Direct Losses to the Economy (Lower GDP) On March 20, Goldman Sachs drastically lowered its U.S. economic projections and is now expecting that that U.S. GDP will contract by 3.8% this year, as opposed to the projection at the outset of the year of 2% growth. It took America about three years to get back to the level of GDP output after the 2008-2009 recession. Based on this data, we project the LOSS in GDP due to the coronavirus crisis:
Direct Losses to U.S. Economy (GDP) $2.39 TRILLION
3. Loss of Jobs/Wages
The U.S. Federal Reserve of St. Louis is projecting the possibility of up to 47 million lost jobs (32.1% unemployment), which is far greater than the Great Depression (24.9% unemployment)
But what’s the cost? One study after the 2008-2009 recession found that losing your job during that recession cost the person $112,000 over the next 25 years. In today’s dollars, that’s $135,000. Using this estimate, that means the COVID-19 economic shutdown cost U.S. workers: Losses in wages to unemployed workers: $5.264 TRILLION
4. More deficit in government spending
All the emergency stimulus efforts of Congress are simply adding to the piles and piles of debt. So the added debt is a real cost that someone will have to pay. At some point, we will pay in a devaluation of our dollars. In the long run, we’re saddling our children and grandchildren with an impossible debt burden.
And what is the U.S. cost? One estimate says the global spending bill from coronavirus will be $10 trillion. Here’s what we know about the cost of the U.S. coronavirus spending bills:
Phase One: A paltry $8.3 billion Phase Two: No one knows; one estimate is $100 billion (also called “chump change” in D.C.). Phase Three: Not yet passed, but the original number of $1 trillion was mocked so the Senate went for $2 trillion, and the House just upped the ante to $2.2 trillion But wait… the Phase Three stimulus actually created an additional $4.5 trillion in borrowing through a “helicopter credit drop” (a manipulation to give the govt. more borrowing power). Which gives us a total of $6.81 trillion, so far. (Phase Four is coming.)
But wait! Since we will never pay that money back (the deficit only grows), let’s add in 30 years of interest, at say 2.5%, and we get a grand total of:
The total cost of new deficit spending: $14.28 TRILLION (and counting)
Total equals …. $32.434 TRILLION
That’s more than the entire annual GDP of the U.S.
The link between unemployment and suicides will be a concern that has to be addressed while the majority of the population stays-in to duck the coronavirus pandemic Public health experts broadly agree that more suicides happen in recessions. Even a pandemic can’t shock the media out of its blinding hostility to President Trump — witness this week’s absurd press eruption after he warned of a likely rise in suicides.
“People get tremendous anxiety and depression, and you have suicides over things like this when you have terrible economies,” Trump noted at a briefing, adding that he believes the isolation many Americans face thanks to social distancing will also lead to more mental health issues.
There’s nothing incorrect — or even controversial — in those remarks. But media outlets that would normally echo any concern about higher mental-health risks proceed to be outraged.
Facebook has greatly reduced the distribution of our stories in our readers’ newsfeeds and is instead promoting mainstream media sources. When you share with your friends, however, you greatly help distribute our content. Please take a moment and consider sharing this article with your friends and family and on your Facebook wall or other social networks that you use! Thank you.
I see the numbers from the COVID19 and feel sorry for people that lost their love ones.I'm afraid that the numbers of people dying from the recession after that will be even bigger!
The psychological damage being inflicted right now is astronomical. Psychology and Therapy fields are going to boom for generations.
Send this to Dr Doom and Deborah.
[[Direct Losses to U.S. Economy (GDP) $2.39 TRILLION ]]
ILLEGALS cost our country more than $1 Trillion dollars per year- every single year, and the number is growing- when all the costs are added- direct and indirect- it’s estimated to be over $500 billion a decade or more ago- and we’re very likely well over $1 TRILLION dollars per year now-
The media just go ‘meh- whatever’
Cloward-Piven. They finally got the opportunity to take us out in one fell swoop and they took it. The Governors and Mayors were in lockstep. My Mayor here in Colorado lashed out at a Council meeting and opposed the council and the bureaucracy and was immediately set upon by a literal Progressive army. These people are feral.
I don’t think it’s going to turn out like they want though. They would need outside intervention.
I have always thought the closure orders were too broad. Surely these rules could be refined in ways to limit contact and transmission while leaving room for some commerce to continue. For example, restaurants permitting dine-in at one-third to one-half dining room capacity, maintaining 6 foot buffer between tables, and dining parties of only 4 or less.
Because of all listed reasons this lock down will be forced to end. Governments can’t continue to generate revenue out of thin air without a fiscal backlash. Hyper inflation, massive depression, or a civil war are possibilities. In the very near future tough choices will have to be made. Whatever decision is made must be based on reason and not emotion. Failure to act appropriately will guarantee things will become much worse.
Oh HELL no. You want my friends and family to reward your theft?
Get thee BEHIND me, Satan.
Governors and mayors will eventually realize that the tax revenues have dropped to zero. Some will raise taxes, but most will figure out that without economic activity, they will lose their power over doling out tax monies to their preferred projects.
No way to calculate the damage. Some children wake up from nightmares. Some parents wake up to nightmares.
Agreed. No common sense allowed.
I know I’m sick of it...I’m doing my part to get back to normal and jumpstart local businesses. Calling around for local masonry bids for a brick wall courtyard on my old house in Tyler.
Going to use that stimulus to get ppl working again.
Nowadays that is a clear signal to demand more from Uncle Sugar, first thing.
Another week or TWO? Another two weeks of this and a hell of a lot of people will be in arrears bigtime. Everybody will be getting familiar with the term ‘force majure’(sp).
I suspect 14-day internationally synchronized lockdowns are probably the way to go.
No stranger contact except with PPE protected licensed medical professionals.
Grocery stores would be closed during the lockdowns. Prescriptions would be left on the hood of your car or doorstep.
No way could I support anything remotely like you are proposing. You cannot remove all the risk of living life. Such a move would cost more lives than it would save.
It's getting harder not to believe this was a deliberate part of some pols' strategy at "helping contain the virus."
I’m right there with you and have been saying essentially the same thing for the past 3 weeks. You cannot shutdown a nation and deny millions of people the ability to make a living.
I don’t have the statistics but suspect a minimum of at least 1/3 of families in the USA live paycheck to paycheck and a $1200 stimulus check is not going to fill the gap. People will be ruined financially and suicides/murders will be part of the fallout.
Yeap but people lime us become a minority , the mainstream media brainwashed everyone!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.