by futurist Richard Worzel, C.F.A.
The US has an out-of-control epidemic on its hands as the Covid-19 virus has been allowed to race through the population through deliberate ignorance, sloppiness, and negligence. The US should go back into lock-down to try to get the virus under control – but I’m pretty sure it won’t because President Donald J. Trump and several Republican state governors would consider this politically unacceptable.
They are going to find that failing to act, which will make them responsible for killing tens of thousands of their own constituents, is an even worse politically.
The implications of this massive political failure are manifold:
- First, the number of cases will continue to explode at exponential rates. That means hospitalizations, the demand for ICU beds and ventilators, and, ultimately, deaths will likewise explode over the several weeks and beyond.
- Second, both federal and state governments have shown that they will come to the battle “a dollar short and a day late”, consistently taking steps that they should have taken weeks earlier, and then only when forced to do so. As a result, they will always be several steps behind, and will continue their failure to contain the explosive growth of the coronavirus epidemic in America.
- Third, when (not if) the US does finally shut down its economy again, it will cause an even worse economic catastrophe that the original shut-down last Winter-Spring. Businesses that managed to survive one bout of shut-down won’t survive a second. Individuals who rent their homes may have been able to work out a deal with their landlords during the first shut-down won’t be able to continue to postpone payment as landlords will be struggling with their mortgage payments. The blow to the US economy – and hence the global economy – will be worse than it was last time.
- Fourth, all of the sacrifices that Americans made last time will be lost, flushed down the toilet. This includes the trillions in federal stimulus spending so far.
- Fifth, America’s standing in the community of nations, already shaky because of the erratic and incompetent foreign policy of the Trump administration, will be dealt another crippling blow. It becomes questionable as to whether America will ever be able to recover its position as the world’s leading superpower, or, in Ronald Reagan’s words, the “shining city upon a hill”. And that’s before it is finally discovered what harm Trump has done and is doing to America’s environment, justice system and intelligence community.
- And sixth, and just for good measure, the stock market crash to come will make that of February to March of this year look benign. It may not be as sudden or dramatic. It may extend over several weeks or months. But it will be worse – much like the stock market crash that took place in 1930, after the seemingly remarkable recovery following the September, 1929 crash.
This is only a partial list of the downstream implications of America’s failure to manage its epidemic. There are many more, some of which neither I, nor anyone else, have yet considered.
There will be those who say I’m being alarmist. They said that when I started commenting on the financial and economic implications of the pandemic back at the beginning of March. So, let me propose a simple, objective test: watch the number of new cases, hospitalizations, and deaths.
New cases are now rising at exponential rates, which means that the US will exceed 100,000 cases per day by early August. Deaths will rise exponentially too, but with about a 4-week lag. If that, or something close to that, happens, then I’m right. If not, then I’m wrong. I’d rather be wrong.
© Copyright, IF Research, July 2020.
