The greatest challenge with being in a lockdown situation is the ability to secure resources. Basically, everything we know about economics tells us that this current situation is not sustainable. So far, here in the US, the government has bled trillions of dollars through congressional bailouts and Federal Reserve market intervention. That is understandable and appreciated on one hand. But that money did not come from a stash somewhere. It is debt incurred on a system already deeply in debt. While even that can be understood and appreciated, the trick is in paying it back.
The basic foundation of economics is human action. If humans are not acting, they are not generating income. If they are not generating income, they can hardly pay taxes to cover the government bailouts. So until we can start doing things again, that hole will just get deeper and deeper. And that can be a major problem. A large portion of the original bailout funds for small businesses went instead to large corporations. Instead of remedying that, congress is authorizing more bailout money. At the same time, various different industries are requesting industry-specific bailouts: travel, medical, oil, etc... Apparently the federal government has unlimited capacity for giving money away. Understand, I'm not saying that people don't need help. I'm just asking the question: where does it come from?
At the same time that individuals and businesses are suffering losses, so are governments. I just saw a report that the DOT in our state is cutting back spending on road construction and repair by 75% over the next year. Income in the form of fuel taxes and speeding tickets are all but nonexistent. I also saw a report today where the US Senate is advising states to file for bankruptcy rather than asking for help from the federal government. At the very least, local and state governments will be forced to lay off large numbers of workers and may end up defaulting on pension plans. Our thinking has apparently been that governments will sustain us till we can get back to work. The problem with that is the various levels of government were never prepared for that and will be strained to the breaking point soon. All of this at a time when it is not safe to go back to work. When we do, said work will be different as well.
The post-quarantine economic world is going to be a very different place and will only be sustainable with many tough, unpleasant choices. In fact, we are going to need to reconsider practically everything we have done heretofore. Personal protection and social distancing will change everything, maybe much more than we can even imagine. As of this writing, while we are still in lockdown, the prediction is that airplanes and restaurants, for example, will have to basically remove seating to allow for proper social distancing. For operations that base their income on a certain number of seats, they will have to raise prices to stay viable. That is simple mathematics. And even that is for those who can afford to reopen or stay open at all. This new standard will obviously apply to many more operations than food and travel. It doesn't take much imagination to envision the resulting inflation across the board. That is inflation on top of increased taxes to pay back all that government has done to sustain shuttered businesses.
Going forward, the post-Corona world will require governments able to respond and apply public health measures and management much better than they have been doing--which is basically not at all. So government needs to be larger or at least much different. Perhaps we are near the end of the Pentagon Dynasty. By changing our focus from policing the world to keeping this nation safe, we could change the overall mission and maybe save lives. But that is still unlikely. Either way, government will also be much more intrusive. Very few want that, but many will allow it. To manage public health, some civil liberties will be lost. I don't like it, but I think it is a given at this point. In fact, I imagine a lot of changes in government will occur because of this virus, very few of them endearing to many of us. In the US, I imagine we are on the brink of a national healthcare system and may even be seriously considering universal basic incomes in the very near future. I don't think this is pie-in-the-sky. In fact, I can see many problems with these approaches. However, my point is not in how things should be but in how I think the likely will be.
I am not trying to make an argument for going back to work before science says it is safe. I am pondering the future world we will inhabit once we do go back--whenever that is. The sudden decrease in oil consumption has many oil and energy companies in trouble. At the same time, the actuality of COVID infections is causing massive disruptions in food distribution channels. These problems will snowball downhill to the least of us, possibly causing shortages and price inflation. A lot of the potential problems I have mentioned, and others that might actualize that I have not mentioned (or can't imagine), could have been mitigated with better management at the federal level. On the other hand, a lot of them could not have been controlled or accounted for, no matter. That also is not my point. There is plenty of blame to go around and plenty of recipients. I'm not interested in that. What I am really concerned about is the true nature of reality, the world we inhabit now and the one we will inhabit shortly. We each need to prepare mentally and strategically as best we can to prepare for it. And we need to stay aware and nimble to best navigate it once it arrives.