I think you are making a number of very optimistic assumptions about the virus and a very pessimistic assumption about the national debt.

First, the moment that lock-downs are lifted, the virus’s spread will resume. More likely, this virus’s impact will come in the form of waves. We are now in the first wave, which will be the worst. The combination of warmer weather and lockdowns will slow the spread in summertime, but relaxed measures will see a resurgence in fall/winter 2020 (albeit, a resurgence we can be more prepared for).

It is likely that we wont see a true recovery from this virus until late next year, by that time, unemployment, student loan debt, mortgages delinquencies…etc will have become so burdensome on the economy that it will take several years, maybe a decade, to make an economic recovery.

Nonetheless, I think the concerns about the deficit are unfounded. The government is a sovereign entity that has the power to produce currency and levy taxes. A sovereign government that does not have a high proportion of foreign-held debt (like the US) cannot go bankrupt anyway.

The solution to this crisis is a rethinking of the economy as a whole. The government is going to need to step up spending and support for the economy this year and next. This support should not be contained by concerns about the national debt…otherwise the economic situation will truly get out of hand.

Written by

Helping You Find a Happy Medium in a Chaotic World | Founder of The Outbound Cow| Please subscribe! http://jlund.substack.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store