ErnieK wrote:
Covid pushes New Zealand into worst recession in years No one is immune from the effects of Covid. Strict measures, economy struggles. Loose measures, economy stays strong. No one is saying that the economy is more important than lives, people are saying that the economy is "lives". We have 330 million people, spending
is the USA. If we get into problems, loads and loads of people will have real problems. I can't even imagine a prolonged (multi year or worse) recession. Yeah, we had smaller corrections for a year because of the dot com bubble, we had another year in 2008 and the current one went from DOW 27000 to 18000 and back up to 28000 in a matter of 6 months. That is basically for the last 20 years. The economy is FRAGILE and is rip for a beating.
How many lives at stake if this current bubble pops because we are in a constant holding pattern for covid?
Yes, NZ saw a deep economic contraction in Q2 (-12% q-o-q) as a result of the strict lockdown. Some countries saw a deep contraction in economic activity due to the high outbreak of COVID in their countries, and some saw a combination of the two. Australia had a less strict lockdown and saw Q2 growth contract by only 7% q-o-q.
New Zealand saw 102 days of no COVID activity and that resulted in a stong economic bounce in June and July. There has been some loss of momentum since then due to the recent outbreak (still less than 50 cases a week). Still, Q3 economic activity is likely to show a significant rebound from Q2, and the country is still in far better economic shape than most of those that have had much less strict mitigation measures.
Different countries have different problems. A Caribbean island nation that relies heavily on tourism could have very strict lockdowns (some have) that keeps the virus minimized. But this will tend to come at a heavy economic cost. At some point they may have to throw in the towel and allow more tourism arrivals, hopefully with measures in place to avoid positive cases arriving.
The US does not rely heavily on tourism, and is a large enough economy that it could have been largely self-sufficient with early strict mitigation measures. That, of course, didn't happen, and we even allowed travellers from Europe and Asia to be packed in immigration halls for many hours back in March, before travelling further into the US without quarantining. We have failed to get testing up to the point of doing more than diagnostic testing and the speed of results remains poor. We are doing little contact tracing, and indeed tracing is impossible in areas of the country where the positive cases are too high.
So yes, a recession was inevitable in the US if we rewind to January. But the US, as a nation, has done one of the worst jobs in the world in handling this, whether you're talking about public health measures, fiscal measures, testing and tracing or public communication and compliance. We could be in a far better place with respect to the scale of the outbreak, the number of deaths, the fiscal and economic costs and the speed of our recovery.