Global Economic Crisis

The coronavirus pandemic is not only a public health emergency of massive proportions; the response by governments worldwide has created staggering economic contraction, leading to unprecedented growth in unemployment. Initial data indicates that countries that previously had low single digit unemployment rates are now, within a period of a few weeks, seeing double-digit unemployment statistics, with no end in sight to further hemorrhaging of jobs.

Policymakers have concluded that sever measures are necessary to contain the coronavirus pandemic; shutting down all but the most essential industries , stay-at-home directives and social distancing. This has all led to unprecedented demand destruction, resulting in massive growth in the ranks of the jobless.

The world is increasingly stuck between a rock and hard place. The Covid-19 outbreak is proving so virulent, the absence of desperate measures enacted by policymakers will result in overwhelming and collapsing the public health system, resulting in massive death. What is occurring in Italy reflects this.

On the other hand, demand destruction on the scale we are witnessing will exacerbate the Global Economic Crisis now unfolding, rivaling the Great Depression in its intensity. This will implode tax revenues, ironically also leading to underfunding and ultimately collapsing public health institutions. The short-term fiscal response by governments will undoubtedly bring on the largest public debt crisis in economic history. In other words, the sovereign cannot indefinitely write checks to the hordes of unemployed , whose number will grow along with the victims of the pandemic.

There is a real possibility of mass death due to the impact of covid-19. It also must be recognized that long-term double-digit unemployment risks undermining social and political order, also leading to mass death through social disorder and massive violence by an increasingly desperate population.