Covid-19 - How to fix the Economy

Paula Stöckelle, 08. Dezember 2020

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As you all probably know, right know we have a huge recession in our economies. Because of the Corona Virus there had to be made some major restrictions to fight the decease. For instance, the shops and especially restaurants had or have to close for long periods to avoid big crowds of people that could easily spread the Virus. Is it possible to build up the economy again? And what is the fastest way?

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Right now, there is a very big unemployment rate in America, actually

the highest one since the 1930’s when there was the “great depression”.

To this time approximately one quarter of the Americans didn’t have jobs

which led to the “New deal” in 1933. This was an ambitious plan to get

the economy back to where it was which forced governments to allow

change and made policy better. In the 1970’s there was again a bit of

a downfall and America became a free market economy. Since then,

everything was fine until in the beginning of this year it all began to

worsen rapidly. Shops and restaurants had to close, people got fired

and had no income at all. This split the population politics wise a bit in

half. The youth are more enchanted by left parties while the older folk

is leaning to the right.

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According to “the Economist’s” YouTube Video “Covid-19: how to fix the economy” there are four stages leading to a fast recovery.

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First up: “Spend first, save later”. In the Video it is said that normally many countries are trying to save money and not to spend to much not to have depts. This however leads to many homeless and poor people and a very slow recovery of the economy. Therefore, right now countries have huge depts from borrowing money, just to make sure, the citizens are doing ok and having enough money to live and to take care of themselves. There is, for example, aid money for people like artists who don’t have a job right now.

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The next step would be “Embrace Change” which for instance means accepting working from home and seeing the upsides of it. Actually, there is one huge pro in this: you don’t have to live in a big expensive city to work there, which is why many companies will – even without Covid-19 – keep home office alive. We also have to except, that service sectors are going to shrink.

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Next, we have to “Build a safety net”. Right now, it is everything but easy for governments but still they manage to stand behind everybody and help where they can. For example, in America, restaurants who had or still have to close for a very long time are getting aid money in the form of direct cash payment. This money comes from packages that are extremely high in value like the stimulus package in the US, the Job support scheme in Great Britain or the short-war schemes in Europe. All of those have worked very well and are a quick and effective help.

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Last but not least, it is important to “Avoid turning inward”. Especially in times of a pandemic which effects the whole world, we have to act as one giant community to be able to fight Covid-19. If every country only focuses on itself, maybe there will be a few that don’t have any or very little diseased people, however if not every country is on the same level with dam up those numbers, it will spread again, and everything was for nothing. And this is why keeping all hygiene products like masks and germicide inside the country and not allowing them to be delivered to others doesn’t help at all. If one country doesn’t have any or very few factories to produce those how should they be able to fight the Virus?

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Now there is no reason to be pessimistic, at least in terms of the economic downfall because it is recovering very quick and adapting to the new situation. Actually, it is faster than the fight against the decease itself, however I am optimistic that this will also be dammed up in the near future.