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Possibly because no one has the answers.
Quote from: drfchound on June 27, 2020, 06:53:56 pmPossibly because no one has the answers.We do have the answer though. Usual recessions are due to overheating of the economy sending inflation rising. That requires us to dampen down the boom, through rising interest rates. That deliberately sucks demand out if the economy and that dampens spending. So companies sell less and cut jobs.In those usual recessions, people getting financially hurt is more or less inevitable. If you like, unemployment and reduced wages is part of the necessary medicine. Some companies have to go bust because there was too much of an economic boom before and that was the problem that had to be corrected.This is totally different. Here the loss of demand is not because the economy was booming. It's because people CAN'T spend because of the restrictions due to the virus. Forcing companies out of business in this situation is absolutely NOT the solution to the problem. Sooner or later, the virus will pass, and the economic activity WILL recover. But if we have let companies go bust, and skilled workers have lost their jobs, we won't be able to recover quickly, if at all.The answer now is very simple. Government has to keep borrowing and keeping companies afloat until the virus is defeated. If that means another £2-3-4 or even 500 billion of Govt debt, so be it. Better that than a post-virus economy that has lost 20% of its companies and has 5million on the dole.It's elementary economics. But it's frightening that Sunak is now talking about Govt spending having to be cut because the debt is too big. If he does that, this is going to be a shockingly tough decade.
Despite what they are saying publicly I'm hearing lots of encouraging stuff from inside departments about spending plans. Listen out for the term "shovel ready"
Government.And here it comes..... Look at the bullet points. http://news.sky.com/story/coronavirus-recovery-plan-boris-johnson-channels-1930s-us-new-deal-with-building-strategy-12017649The company I work for have been holding meetings with government throughout the lockdown and this has been the term they have been using for around the last 4 weeks.