Pandemic 2020 and the repercussions for the nation - Part three

The foreseeable economic future of the Nation:

The Dow Jones reports a loss of 10%, the lowest in 12 years. Not as bad as the last major drop in 2002 at 16% drop, and nowhere near the crash of 1930 at 52.67% drop.

There are currently no antiviral drugs approved by the FDA to treat COVID-19.

The nation has now recovered only about a third of the 22 million jobs it lost to the pandemic caused recession, according to the Labor Department. With confirmed COVID-19 cases in a severe uptick across the Sun Belt states, unemployment rates are plateauing or heading back up. In those and some other states restaurants, bars and other retailers that had re-opened are being compelled to close their doors again. Because of the high cost that goes with opening some businesses with perishables and other background costs, many of those will not be able to reopen again. With many others who took government loans to reopen, and not being able to afford another loan, will find it too expensive to reopen. A growing number of people are finding themselves without a job and with few prospects of a new job or one that will meet their monetary needs; especially those with fewer diverse skill sets. 

Social isolation is unnatural for we humans and also takes a toll on our mental states. Paired with an inability to provide for ours and our families needs, our mental well-being is also in jeopardy.  Promises of “relief checks” are somewhat empty by the very fact that the money promised will in no way cover the loss and increased debt that has come from the pandemic. It may be a case of too little too late. Discussion of monthly checks for relief may seem like a good idea on the surface but if every consumer begins to receive the same amount of money at one time (an increase for some, an excess for others), cost of goods will increase to compensate and negate the relief. 

Some larger businesses are finding that letting their less expensive items sell out and limiting the less expensive merchandise on their shelves they can increase their profits because of perceived shortages. This practice will of course make the companies that produce the cheaper products to take a substantial loss and possibly close their doors. This will also add to the burden on the poor and underpaid. 

Essentially, I see a gentrification of consumerism on a massive scale could happen.  Some small businesses will be closing their doors permanently due to an inability to pay rent for their store space  while closed, let alone afford the possibility of a reopening. The tourism industry, and the small businesses and people who rely on that income will take such a loss that some places won’t recover. Building owners that have mortgages to pay will lose them to the banks because of the small businesses closing that they relied on to pay them. Real estate will become heavily a buyers market but with few buyers. Banks will take a heavy loss on the properties that they foreclose. They will have less money to loan to individuals and even if they too received Government bailouts, the majority of the money would go to investors to cover loss. The disparity between the richest and the poor will become a “canyon”. 

Now that many countries are not accessible to each other due to restricted travel. If the pandemic lasts for two or more years (like the Spanish Flu) even major companies that are not diversified in other areas could fail. 

We may find this country in a socialist state for a time, as the government keeps the majority of its citizens going. This will cause the dollar to depreciate in the world market to possibly half of the value. International trade will become unbalanced and will cause their goods to become more expensive than ever. A resurgence in made in America products as they become cheaper may begin to stabilize some of the economy. Rationing as was done in the world war era may come back as farming becomes more essential. Fuel prices will become temporarily low while the demand goes down but may spike as the Government checks are flowing. The government should institute a gas cap on prices that they will allow it to be sold at and will temporarily cause a gas shortage.  This should cause a surge in alternative energy and non fossil fuel vehicles. It may also drive the US to rely only on fuel from this country. They may even take control of the oil away from outside companies. 

A butterfly affect of this move towards Socialism is that the National debt will see its largest growth and then (worst case scenario), because of the devaluation of the dollar and the dramatic increase in debt, and the possibility of defaults in some loans, the nation’s credit score will drop. This will also severely devastate small countries who were allowed to lend “money” to the US so that they would receive real money in return. Unless we split the debt into foreign debt and non foreign debt and pay more to our internal investors there will be a loss here as well. This will affect retirement funds, 401k, military TSP, and government bonds.