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Working From Home - Impacts of Coronavirus
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OnboardG1:

--- Quote from: GeorgeOfTheJungle on July 27, 2020, 10:48:37 am ---Look, all the europeans now owe 750 billion euros more than last week, to begin with. How good is that in your opinion?

--- End quote ---

Not that big a deal. Quite genuinely, people get very bent out of shape over large emergency borrowing because of the making the classic "My country is like my household error". The way to look at it is: "What happens if we don't borrow this?". The analogy would be the marshall plan in the aftermath of the Second World War. We know what happened after the First World War to nations which had been hit hard by the conflict. France, Germany, the Low Countries and the UK had serious economic trauma for two decades, only made worse by the 1929 crash. Compared to the aftermath of the Second World War where a huge package of loans was used to rebuild those economies. That huge debt slowly bled away into insignificance over the next thirty years. The UK paid the tail end of ours off in the 2000s. That huge amount of money went towards building industries, keeping people employed and stopping the flow of money from grinding to a halt, and it worked. In this case government borrowing rates are very low because of all the spooked investors out there (A company can go bust tomorrow, but short of war a G20 economy is unlikely to blow up any time soon). A 30 year gilt is at like, 0.6% right now. If the government does nothing its tax revenue collapses and it can't service its debt. If it borrows money cheaply to stimulate the economy it can support as much of that revenue stream as it can (while saving a lot of jobs and livelihoods) and the debt gets slowly abraded away by growth and inflation over the three decades it takes the bond to mature. That isn't to say there's no danger in borrowing heavily. Some secondary effect could turn up that destabilises the system anyway, but you don't fix the problem that might happen, you fix the problem in front of you right now.
GeorgeOfTheJungle:

--- Quote from: OnboardG1 on July 27, 2020, 12:29:14 pm ---The analogy would be the marshall plan in the aftermath of the Second World War. We know what happened after the First World War to nations which had been hit hard by the conflict. France, Germany, the Low Countries and the UK had serious economic trauma for two decades, only made worse by the 1929 crash. Compared to the aftermath of the Second World War where a huge package of loans was used to rebuild those economies. That huge debt slowly bled away into insignificance over the next thirty years. The UK paid the tail end of ours off in the 2000s. That huge amount of money went towards building industries, keeping people employed and stopping the flow of money from grinding to a halt, and it worked.

--- End quote ---

From "How to become the world's #1 power, chapter 1"

"First we bomb Europe, then we bill them for the bombs and the bullets, and after that we give them a loan on the condition that they buy the goods from US to rebuild everything that we have destroyed. And by the way, lest they recover too quickly, we better divide it in two halves. Let's make sure the east ends in the hands of that communist assassin."

:-)
Zero999:

--- Quote from: GeorgeOfTheJungle on July 27, 2020, 09:47:42 am ---
--- Quote from: MK14 on July 27, 2020, 09:12:41 am ---[]-Successful/reliable treatments, may be created. Which although the virus may still be around, if you can treat it, and the death rate, becomes very small.

--- End quote ---

The death rate is already very small, comparable to a normal flu (650k/yr), and less that half the deaths/yr in car accidents (1400k/yr).


--- Quote --- Globally, the World Health Organization (WHO) estimates that the flu kills 290,000 to 650,000 people per year
--- End quote ---

--- End quote ---
650k is the upper estimate for flu and as mentioned above, COVID-19 is on top of that, with a load of mittigation slapped on top. Co-infection with flu and COVID-19 is also likely to increase the fatality rate, above the sum of the two diseases. There's also the possibility of long term health problems, due to COVID-19, even in those who have a relatively mild illness.


--- Quote from: GeorgeOfTheJungle on July 27, 2020, 10:29:46 am ---
--- Quote from: MK14 on July 27, 2020, 10:03:18 am ---We could argue with the figures. But I hope we can agree, that they would be massively worse than they are now, especially in countries that have nicely brought the illness under control.

--- End quote ---

Maybe. Maybe not. Look at Sweden. We'll see. But keep destroying normal peoples' businesses and incomes and we'll have a problem much worse yet.

And as always, don't forget to ask who wins, and follow the money, please.

--- End quote ---
Contrary to popular belief, Sweden have introduced mandatory social distancing measures to control their epedemic such as cancelling large events and banning gatherings of more than 50. They've just been a lot lighter, than other European countries, who are now moving towards similar measures as Sweden. You could be right: it's possible the extensive lockdowns were unnecessary and lighter measures would've worked, abeit taken much longer to take effect and resulted in more deaths.  It's also possible the lockdowns in Europe just moved deaths into the future. On the other hand, the economic effects of this might also be more short term, than many fear and countries with strick lockdowns might end up with fewer deaths. It's too early to say whether Sweden got it right or wrong.
SilverSolder:

--- Quote from: OnboardG1 on July 27, 2020, 12:29:14 pm ---
--- Quote from: GeorgeOfTheJungle on July 27, 2020, 10:48:37 am ---Look, all the europeans now owe 750 billion euros more than last week, to begin with. How good is that in your opinion?

--- End quote ---

Not that big a deal. Quite genuinely, people get very bent out of shape over large emergency borrowing because of the making the classic "My country is like my household error". The way to look at it is: "What happens if we don't borrow this?". The analogy would be the marshall plan in the aftermath of the Second World War. We know what happened after the First World War to nations which had been hit hard by the conflict. France, Germany, the Low Countries and the UK had serious economic trauma for two decades, only made worse by the 1929 crash. Compared to the aftermath of the Second World War where a huge package of loans was used to rebuild those economies. That huge debt slowly bled away into insignificance over the next thirty years. The UK paid the tail end of ours off in the 2000s. That huge amount of money went towards building industries, keeping people employed and stopping the flow of money from grinding to a halt, and it worked. In this case government borrowing rates are very low because of all the spooked investors out there (A company can go bust tomorrow, but short of war a G20 economy is unlikely to blow up any time soon). A 30 year gilt is at like, 0.6% right now. If the government does nothing its tax revenue collapses and it can't service its debt. If it borrows money cheaply to stimulate the economy it can support as much of that revenue stream as it can (while saving a lot of jobs and livelihoods) and the debt gets slowly abraded away by growth and inflation over the three decades it takes the bond to mature. That isn't to say there's no danger in borrowing heavily. Some secondary effect could turn up that destabilises the system anyway, but you don't fix the problem that might happen, you fix the problem in front of you right now.

--- End quote ---

This all makes total sense but there must be a point where the amount of debt becomes so large that it is totally unsustainable - for example, as happened to Greece.  It seems the "unsustainable" level is somewhere between 130% and 180% of GDP.  I know you can't directly compare with family economics, but it is roughly equivalent to having maxed out your credit card.
coppice:

--- Quote from: SilverSolder on July 27, 2020, 02:02:30 pm ---This all makes total sense but there must be a point where the amount of debt becomes so large that it is totally unsustainable - for example, as happened to Greece.  It seems the "unsustainable" level is somewhere between 130% and 180% of GDP.  I know you can't directly compare with family economics, but it is roughly equivalent to having maxed out your credit card.

--- End quote ---
The issue is not really the size of the new debt. Its the interval between problems. This current problem has happened before most countries were able to work through the aftermath of the last big problem, and clear that debt.
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