By Ian Bremmer
As economies around the world tank, unemployment soars, and countries are rushing to produce working vaccines, many are trying to avoid what could be coming: a global depression. Many are hoping that when scientists find a vaccine, the world will simply rebound into what it once was, and life will go back to normal. But this won't be the case. Neither will the steady bounce-back of the 2008 economic recession. That's because a depression is much bigger. It is global, cuts deep into our lives, and is long lasting. "COVID-19 fears will bring lasting changes to public attitudes toward all activities that involve crowds of people and how we work on a daily basis; it will also permanently change America’s competitive position in the world and raise profound uncertainty about U.S.-China relations going forward."
Today, the world is much more connected than it was in 2008. China has grown rapidly, and when it slows, everyone else does too. Social safety and healthcare providers are starting to feel the strain, and many will break. The Federal Reserve's June report said that this is the most severe downturn in economic activity since WWII, and that was before the most recent spike in coronavirus cases. Every time there is a new wave and we are forced to shut down again, more people will lose jobs. Even a vaccine won't be a cure all. Some will get it first, and others may choose not to get it at all.
Governments will have to change they way they spend taxes, and temporary emergency measures won't be enough. These temporary bailouts and high hopes for a vaccine have kept stock markets afloat, but supply and demand have suffered major hits.
So economic recovery will come in a series of short bursts. To make it faster, leaders could tell people to face reality, and team up globally to fight the virus. "Today’s lack of international leadership makes matters worse. If COVID-19 can teach world leaders the value of working together to avoid common catastrophes, future global emergencies will be that much easier to manage for the good of all. Unfortunately, that’s not the path we’re on."
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