The collapse in economic exchange occurred, not because of a drop in demand, but because of a drastic reduction in the availability of the markets in which exchanges can occur. With so much of the economy closed by executive order and/or direct pandemic effects, there is simply nowhere for goods to be sold for many businesses. This has led to widely publicized destruction of animals and food products amongst other effects. The question becomes to what degree business leaders will have confidence that demand will return once restrictions are lifted and to what degree consumers will have confidence that they can safely exchange their resources without fear of physical health or inability to replenish what they exchanged. There was a theory, or perhaps a hope, early in the current crisis that the recovery from both the pandemic and the economic disruption would be rapid. The theory was that because the underlying fundamentals in the economy had been solid before the pandemic struck, they would rapidly return to prior levels once the mitigation efforts drastically restricting trade were lifted. Implicit within that theory was the assumption that the restrictions would be lifted quickly because the U.S. would keep or quickly get the virus under control. As it has become apparent that the pandemic is going to continue as a major health hazard for much longer, even those with the most optimistic views regarding the timing of disease control and speed of economic recovery have been forced to shift their timetable. Other voices, present even before but much louder now, have predicted much longer timeframes for disease control and for economic recovery afterwards. We have already outlined our assumptions for the pattern for the pandemic itself in this country. In forecasting the length and pattern of the recovery and the severity of the impact in the interim, numerous factors must be considered. The longer markets are constrained due to the effects of the virus itself and of closures and other mitigation efforts to slow its spread, the more likely it is that the changes will become permanent rather than temporary. For starters, there are businesses that will simply not survive the crisis. This is already being seen in food service and retail and is spreading to many other sectors. Beyond the loss of businesses that lacked the access to capital necessary to survive the immediate crisis, the ripple effects of lost business and income and the permanent changes in operating models and consumer behavior will have impacts on the economy even after the pandemic has passed. This is not, by the way, an argument in support of eliminating economic restrictions imposed by government. Even without such restrictions, the pandemic would cause many of the same closures or reductions, if not more so, as in the case of meat packing plants. If employees and customers are dying or simply too sick to work or shop, businesses will still close. If the effects stem from a pandemic that is more severe or lasts longer due to inaction, they will actually have more significant and longer lasting effects on future economic recovery. There is room for considerable argument and refinement in the exact character and application of governmental restrictions to mitigate the pandemic. However, there is no question that restrictions in some form for some length of time are still required. Our assumptions regarding those restrictions have already been discussed.
∴ PROGNOSIS
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