29. The no recovery scenario of a permanent GDP collapse
The
biggest economic risk of the coronavirus pandemic, which no trader has so far
factored in, is a permanent change in consumption habits. After having been
obliged to try it for a while, consumers may actually stop buying products and
services they don’t need. This would be catastrophic for the economy, or at
least for GDP, the useless, coarse measure of how our economy is doing. GDP
would be permanently affected and there would be no recovery. Of course, the
economy only makes sense as a construct to improve human lives and, therefore,
in real terms this may not be a disaster at all, after a period of adjustment
to pivot jobs, develop new industries, etc. The big fly in the ointment, and
there is always one, is that our tax system generates its revenue from middle
income work and consumption, and tax revenues may not suffice to sustain, let
alone develop, the welfare state. We may come to a point where we finally have
to tax corporations and wealth fairly, perish the thought
Length: 993 characters
Length: 993 characters
Comments
thanks for the post, I look forward to more!
Glad you are looking forward to more, I am committed to a further 972, as you can see in post number 3... so plenty to come, one every day (a bit of a homage to the 1,001 Arabian Nights