Economic trouble during COVID-19: how will this affect businesses?

By Howard Hubler

Life as we know it has completely changed. Every business in America just hit an historical brick wall.

Today, I am writing about an issue that is popping up more frequently in the media over the last few days. That is the prospect of spot opening various places around the country to cautious relaxation of the sequestering regulations. As I write this, some states out west with sparse populations have hardly any reports of coronavirus victims. Likewise there are other parts of the country whose “curve” has flattened out to the point that there is a safety zone perhaps a week or two in the future.

The question becomes, when is it prudent to open a part of our country? The other question becomes, in waiting too long to open up daily commerce, what are the results of future devastation that likely result in the collapse of our economic system? For example, will transportation succeed, will retail succeed, will health and hospital succeed to a future of health and success? Our GDP is scheduled to drop by 30 percent and unemployment is supposed to be north of 20 percent today and probably 30 percent by time this article hits. Ultimately, we have to ask, what is the cost of these things in terms of human lives and suffering? Yes, the economic trauma will create a tremendous amount of suicides nationwide.

I believe that we are currently about to take 20 percent of our gross domestic product and put it on a bubble. If we have another stimulus or two it may inflict so much economic pressure that it would be hard for the country to recover. I have been abroad to countries that have had hyperinflation. In America when you talk about this, the joke is just to cancel a portion of that debt (ha ha). That debt comes by way of people that buy bonds and invest in our money supply. To cancel that debt wipes out your investment. You may not even know that you’ve invested in cash and currency. So to everybody across the nation including you, your retirement benefits probably have some cash and currency investments. Those would all be defaulted upon. How is that working for you?

When is it time to consciously consider opening up the economy back up to where it was, so that later this year we can have some form of recovery?  Yes, there are two very strong pressures at work here; to stay the course or to relax this sequestering. At some point, we are going to have to discuss the practicality of opening things back up and it will be the businessmen and women that will lead the charge.