Social Distancing and the Economy

If you ever have worked in disaster services, you become aware of the economic effect of any disaster. Most are well below where most people will notice. A house fire, a car accident, serious disease can devastate a family. Some people end up in the streets for a myriad of personal family disasters. However, the greater society barely notices. At least as far as the wider society is concerned. Social workers know these stories and deal with them often. In your personal life, you have come across these disasters. How many times have you contributed to a Gofundme account for example?

But these are personal disasters that make very small blips in the economy. Then there is the usual sundry of disasters we are used to. On the upper end of these are hurricanes and major fires. In some ways, Wall Street has priced these in. However, earthquakes, fires, and hurricanes do have an economic effect. Most of them are local, and have a depressive phase, with an expansion phase. Why relief agencies prefer you to donate money. This way supplies are bought locally, when possible, priming the economy to rebuild.

A global pandemic is a whole different level of disaster. It’s not just the effects on human health, but a global recession. This is what economists call a black swan. It came out of nowhere, it’s spreading, and it is slowing economic activity around the world. This is one reason the president and his administration have done all they can to deny the seriousness. They know that this will lead to a recession, and whoever has the helm…