Colapso Económico

Economic Collapse

As terrible as the fear and suffering caused by the deadly Covid-19 virus is, many analysts think that the growing disruption of the world economy, and of the component national economies, will be the deadliest and longest lasting effects of this crisis. So what is the world’s biggest economy, the United States, doing to protect its economy, it’s businesses, and the people who work for them?  How does that affect the US expatriates in Manabi?

Many scientists believe that the virus will continue to spread until either a safe and effective vaccine is widely available worldwide, or until more than 70% of the world population has been infected and is either dead or immune, thus ending the spread of Covid-19.

It is true that human testing has begun on at least one vaccine candidate. But these trials take months, and often several candidates need to be tested before a successful vaccine is found, and some viruses still do not have vaccines. Each vaccine must be tested to insure it does not have secondary effects, interactions with other drugs, or negative effects on people with specific conditions or medical histories. Then the vaccine must be manufactured on a massive scale and distributed across the globe. The scientists say it will probably take at least 18 months.

In the meantime, the only way to slow down the virus is to shut down the economy. This is why we are isolating in our homes, and all non-essential business are closed. Shutting everything down is relatively easy; it is starting them up again that is the problem. In the US the two most populous states, New York and California, closed businesses and told people to stay at home, just like in Ecuador. New York City now has more than 6% of the cases IN THE WORLD, and it is shut down.

In the US the great majority of the workers live paycheck to paycheck. 40% of Americans say they would have trouble finding $400 for an emergency. If they can’t work, they don’t get paid. Most have already paid March rent, but many will not be able to pay April, and worse in May. Landlords need income to pay mortages, so they will evict people who can’t pay. Worse, in the US most poor people do not have health insurance and there is no national health service.

Meanwhile, while most of the giant multinational corporations will survive and recover, millions of small and medium business cannot survive a year without income. They will close, their owners bankrupt. But the US has one advantage no other nation has.  They own and operate the printing presses that make hundred dollar bills.

So the US government has declared that they will give away $2.1 billones, to save the US economy. That is 10% of their GDP, largest in the world at $21 billons (for comparison, the 2019 GDP for Ecuador was $0.00109 billons). The question is, who gets the money?

The Democrats, party of the workers, wants to immediately send a check for $1,200 to every single American taxpayer, to help them through these troubled times. But the Republicans, party of Trump and most big business owners say the people losing the most money in the ongoing stock market collapse are the rich, and so they should get most of it. And while they bicker, the markets keep going down and the common citizens grow more desperate, just like here.

When I was in college, we used to argue whether, when global capitalism finally collapses, who will be worse off, the people in the most developed countries with their mega-cities and highly developed technology, or the developing world, with more traditional production of food and natural resources. I believe we are about to find the answer to that question. So far, none of the expats I know are planning to return to the US, but they all want that $1,200!