Edward Lotterman: History tells us how we will finance COVID-19 responses

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The global economy faces the effects of the worst acute pandemic in a century. HIV/AIDS killed more people over decades, but did not hammer economic activity, business profits and household income as COVID-19 has. For that, we must go back to the 1918-20 Spanish flu that killed my grandmother and some 50 million other people around the globe.aWhen a nation produces a lower value of goods and services, national income as a whole drops, as must personal income. But this loss does not hurt everyone in the same proportion. Those with small businesses, hourly wage workers and self-employed people in the “gig economy” or who work as consultants are hit much harder than salaried people with jobs in safe locations or those who can work from home.
And people who live from financial assets, especially those in the top 5 or 10 percent of the income distribution do best of all. They may see the value of their stock portfolios drop but have enough income to not see even a blip in their consumption lifestyle.
There are two key economic questions we face: First, what can be done to spread the cost of a true “exogenous shock” or “act of God” …

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