I think you may be right. I haven't had my income affected too badly by covid, but it's gone down a bit. However, I'm actually cash positive, because I'm spending so much less. I'm not sure that my spending will return to "normal" when covid is gone. GDP is basically a measure of the totality of expeditures in the economy, so if there are a lot of people like me, GDP will be down, even if employment recovers.
I don’t think that has happened yet. The bus was going 80 down the highway but the wheels fell off. Its still going 65 and there was a loud thump but besides that everything is still operating as it was before. There hasn’t been a sudden shift in priority people are still surfing on i phones and buying shit on amazon. The guy sitting next to the window might be staring at disbelief as the tires roll past but for the most part things are the same as they were before the wheels fell off. That will soon change but it hasn’t happened yet. Events have been put into motion that cannot be undone. Future pain is guaranteed but our minds have a tough time comprehending the massive changes that are upon us. 10%? GDP is like 4 years of growth and that’s just the beginning, many of the layoffs that are coming haven’t occurred yet, government stimulus haven’t been cutoff. Honestly I have no idea what’s gonna happen next the rules are gonna change so fast that you won’t even have time to say WTF.
To be fair, he was referring more to the fact that (A) China's economy is going to recover much faster than ours, (B) Europe has gotten it together to the point that Italy or Greece leaving the Eurozone is no longer even being talked about (C) the varying levels of success and failure when it comes to preserving economies is going to reshape international trade.
Perhaps, politically they may have gotten their shit tougher but tourism is 13 percent of Italian gdp and 11% of Spanish. Those have gone down to near 0 and that’s not accounting for other industries affected. Unemployment was near 20% prior to the pandemic it’s probably close to 50% now. So while they may have dealt with the crisis better it may not be better enough to matter.
How much of that do you think is gonna go towards paying debts and back rent and stuff or end up being stashed under mattresses? Having money and having money to spend aren't necessarily the same thing, and if this recession has spooked the spendiness out of people . . . that's gonna slow the recovery.
Probably not much for debt, under the mattress definitely. I think the bottom 50% spent like 3% more the top 50% 10% less. If you get rid of the 600$ that money will instantly exit the economy and it’s a gonna be the economic second wave. Go long ammo.