They’re averaging 2000 deaths a day, and five million new job losses a week, now. Here are the numbers for this week alone:
"The modest decline in initial jobless claims to 5,508,500 last week, from 6,615,000, means that the unemployment rate is now on track to hit somewhere between 15% and 20% in April, well above our previous forecast that it would peak at 12.5%." – @CapEconUS
— James Pethokoukis (@JimPethokoukis) April 16, 2020
At the current rate, by the end of next week, the Americans will have lost every new job created since the turn of the millennium – in about four weeks.
And the best, most optimistic projection? That they won’t turn the corner until the last quarter of the year – October:
Gut punch | "We do not expect real GDP growth to turn positive until the fourth quarter of this year, reflecting our view that economic activity will not begin to improve materially until new US cases of the COVID-19 virus are driven down substantially." – @IHSMarkit
— James Pethokoukis (@JimPethokoukis) April 16, 2020
All of this matters massively to Ireland, even if it wasn’t a story in its own right. We’re looking at a historically bad American recession, which means that even when we open our own doors again, demand for exports will be down, and tourist numbers might take years to recover. Jobless Americans aren’t going to be as interested in the ring of Kerry as they were a year ago.
And it also has much longer-term repercussions than that. Nobody’s talking about it, but the Americans are in a horrible position for a prolonged recession. The US Government’s national debt is 22.7trillion dollars. Obama doubled it in eight years, and Trump, for all his complaining about it during his election campaign, is on course to almost double it again if he’s re-elected and serves the full eight years.
Will he be re-elected, though? On those figures, it’s almost impossible to see how (with apologies to the Trump fans in the comments). A lot of those people losing their jobs are Trump voters, after all. His opposition might be no great shakes, but “you’ve lost your job and Trump made a mess of the crisis” is a lot better a message, politically, than whatever he’s going to be able to come up with. We’re probably looking at four years of Joe Biden, with things being so bad that we get four years of a more normal Republican after that.
And here at home? Well, these figures from the USA make the FF/FG framework for Government even more inexplicable than it already is. How do you look at these numbers and promise no cuts, and no tax increases? Even an old fashioned Tory boy like me, who abhors tax increases, can do sums. Without tax increases and spending cuts, Ireland will simply run out of money. So will America. And the UK, and everywhere else.
Telling people now that none of this is going to happen is setting yourself up to be hated. The smart thing to do is to be as pessimistic as possible, and hope you get credit when things don’t turn out as bad as feared.
But it’s very hard to see, looking at these numbers, how they don’t.
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