The Covid-19 Economic Crisis Will Change Everything: Short Term and Long Term Effects

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Author of The Blackout Book and the online course Bloom Where You’re Planted

Whether you think the global pandemic is “just the flu” or you realize it’s the real deal, one thing is difficult to debate – many Americans are already feeling the economic pain being caused by the outbreak and the measures taken to stop it.

Unemployment claims skyrocketed this week as businesses laid-off employees in an attempt to weather the storm. More than 281,000 people filed for unemployment and those numbers would have been even higher if the influx of claims had not crashed the systems in several states.

In a news release, the Department of Labor said:

During the week ending March 14, the increase in initial claims are clearly attributable to impacts from the COVID-19 virus. A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not. (source)

At the same time as employees are filing claims, businesses are trying to figure out how to stay afloat. Restaurants are switching to carry-out only. Bars are closed. Retail sales are down unless the business happens to be selling vital supplies like medications, food, and the new gold standard, toilet paper and Lysol wipes.

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The Covid-19 pandemic is causing an economic crisis that will have both short-term and long-term effects. This will challenge your adaptability skills, but I want to stress something: life will be different, but that doesn’t mean life is over.  Here’s what you need to know.

Recession or Depression?

This is just the beginning of the economic crisis bearing down on us. As social distancing measures become more widespread, less and less money will be in play – both earned and spent.

Oh, and don’t forget, the stock market is setting record lows that haven’t been seen since the Great Depression. (And this isn’t just in the United States – it’s happening across the globe.)

Fortune reports that we’re heading straight into a recession.

…the next Great Recession began this past week, as the U.S. virtually shut down its economy to prevent further spread of COVID-19.

First, the NBA suspended its season, followed in rapid succession by the NHL, the MLS, the MLB, and most recently, the PGA’s cancellation of the 2020 Masters golf tournament. Then Broadway closed down, followed by cancellations at nearly all major venues. Businesses told their employees to work from home. In Minneapolis, the normally-packed Mall of America parking garages are virtually empty. In New York City, Mayor Bill de Blasio just limited all restaurants, cafes, and bars, to takeout and delivery. (source)

Others suggest what’s coming is going to be more of a depression than a recession. What’s the difference? It’s all about the length of time the economic downturn lasts.

A recession is the contraction phase of the business cycle. A common rule of thumb for recessions is two quarters of negative GDP growth. A depression is a prolonged period of economic recession marked by a significant decline in income and employment. (source)

Considering the fact that the US government is preparing for a Covid-19 siege that could last 18 months, it appears we’re looking at the D-word.

Our immediate financial problems

While this economic crisis looks as though it may continue for quite some time, let’s break this up into immediate and long-term issues.

Currently, many people are facing an abrupt loss of income. And it’s likely that a lot of the folks losing their income don’t have the safety net of a large emergency fund – 60% of Americans are only one missed paycheck away from disaster.

At the same time as this downturn in income, people have been spending a fortune on food and other supplies to get through a potential quarantine that could last anywhere from 2 weeks to multiple months. This is not an extravagance – it’s a necessity. And there are fewer goods to buy, leading people to purchase whatever is left rather than whatever is the most affordable.

Our supply chain is broken because of our heavy reliance on Chinese goods. There are shortages, whether the government wants to admit it or not. You need only to walk into the nearest grocery store in most towns in the US to see large bare spots on the shelves. Instead of canned goods being lined up all the way to the back of the shelves, they’re perhaps two-deep to make the shelves look fuller. Meat coolers are half empty. There’s no bleach, no toilet paper, no Lysol wipes, no rice, and no beans to be had in many areas.

Our immediate concerns are the loss of income, paying current bills that are due, and getting enough food and supplies to see our families through whatever quarantine or isolation measures are demanded by the government. I wrote more about the cost of a Covid-19 quarantine here.

And unfortunately, this is just the beginning.

Our long-term problems

As the economy continues to plummet because people are only purchasing the bare necessities, we’ll see other issues arise. How will you pay your rent or mortgage if your job qualifications are in a field that is now considered a luxury? How will you keep your utilities on when you’re not making any money? How will you feed your family, keep a roof over your head, pay for medical care, and maintain a vehicle?

If you’ve never been through personal financial hardship before, you could be in for a terrible reality check when the cost of your most basic essentials is out of reach. But many of us have been there. We can tell you that it often makes you feel powerless – it’s difficult and humiliating, but you can get through it.

If you’re a business owner, how will you keep operating if you have no working capital? How can you hire people if you don’t know whether you’ll be able to keep them on board for more than a couple of pay periods? How can you buy more inventory and can you even acquire that inventory anymore?  Will you be able to get the parts you need to repair items if you run a repair service business?

As you can see, there are more questions than answers. The future is quite uncertain.

If you have prepped for disruptions, you’ll be okay…for a while. You will have used up a lot of your stored goods getting through the quarantines, should they occur, and making up for the shortages in stores. This certainly gives you a jump on the crisis, but do you actually have enough for the 18 months to two years of disruption being predicted?

It’s scary to think about surviving an economic depression, especially after we in America have been more or less pampered for most of our lives. But it’s better to face reality now than to be shocked by it later. Knowing ahead of time can prevent financial mistakes you’ll regret for years.

Things are going to look a lot different in 2021 than they did in 2019. Remember that we are the children and grandchildren of those who survived the Great Depression. We will get through this.

How do you survive in an economy like this?

I know the things I’ve laid out here are alarming, maybe even terrifying. You may be wondering how in the world you can survive.

Well, you can. This has happened before, maybe not on such a massive scale, but there have been other recessions and depressions. People have lived through drastic changes in their circumstances. I’m not suggesting it’s easy but it is possible.

  • Right now, cut your expenses. You need to stop making purchases that are frivolous. You need to get rid of gym memberships, third phones, and subscription boxes. Make these cuts now. Ignore anyone who tells you that you are further damaging the economy by these cuts – they aren’t the ones who are going to feed your family.
  • Look at your living situation. I’m not suggesting you move right this minute – on the contrary, that would be a nightmare with quarantines and curfews looming. But begin to consider whether or not you are living in the most economical way. It’s likely that you will soon see more extended families and friends living together to save on bills. You may need to relocate or you may need to allocate space in your home to others. Again – don’t do it right this second, but start to think about your options.
  • Go back to basic skills. Now’s the time to start some seeds and begin figuring out a garden, even if it’s just a few plants on your patio or balcony. Learn to mend and repair things instead of throwing them out and replacing them. Cook from scratch instead of buying processed food or ordering out. Start now to live more simply and focus your spending on the tools required for that.
  • Practice hardcore frugality. I’ve written a lot about living inexpensively. You can find the archives here. You need to embrace a thrifty state of mind instead of railing against the system that means you can no longer afford a $6 coffee every morning on your way to work. This may be difficult – anger is a normal response to a change in circumstances that is beyond your control. But the faster you can get past the anger, the sooner you can find a new normal and some peace of mind.
  • Help others. That probably sounds crazy after I just said to cut your expenses, but helping others builds a sense of community and that is essential during difficult times. If you have elderly neighbors, take over a hearty, filling meal or visit with them (once it’s safe to do this.)  See if they need anything picked up from the store. Offer a hard-working mom some free babysitting one afternoon so she can just take a nap. If you’re shoveling your own snow, go a little further and shovel somebody else’s walk too.
  • Create some odd jobs for yourself. When things get to the point where we can get out and do things again, you may find that working a regular job is no longer possible. If you can’t find work, you can come up with odd jobs you can do.
  • Stay in contact with creditors. As this all unfolds, staying in touch with the people to whom you owe money is the best way to protect your credit rating and your possessions. They realize everyone is in the same position right now, and many of them will be happy to help if they know you intend to pay them.
  • Understand there could be a point when you simply can’t pay your bills. You may end up with the terrible realization that you can’t afford to pay your bills. Of course, you took out credit cards or loans with the full intention of paying the money back, but sometimes circumstances are beyond our control and we have to prioritize survival: keeping a roof over your head, keeping the power on, and having food to eat. If you reach that point, check out this article on how to survive when you can’t pay your bills.

We could be looking at an entirely different version normal when this all shakes out. You can’t completely close down an economy and expect everything to just start back up again in a few months like nothing ever happened.

But you and your family can survive this.

Daisy Luther

Daisy Luther

Daisy Luther is a coffee-swigging, globe-trotting blogger. She is the founder and publisher of three websites.  1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty on her website, 2)  The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived, and 3) PreppersDailyNews.com, an aggregate site where you can find links to all the most important news for those who wish to be prepared. She is widely republished across alternative media and  Daisy is the best-selling author of 5 traditionally published books and runs a small digital publishing company with PDF guides, printables, and courses. You can find her on FacebookPinterest, Gab, MeWe, Parler, Instagram, and Twitter.

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  • Great article, but a bit too late in some parts already. For others, that is just a memory in history, as some of us have already been under quarantine for some time and we don’t have many options, there are only two kinds of people right now, those who prepared and those who did not.

  • School Districts will learn that having students study at home with a real-time internet link to the school will be beneficial to the students, expecially the over -achievers. The class clowns will no longer drag down the serious learners. This will also reduce school shootings, as the students only show up to the school building for one or two days a month for physical education and additional testing.

    The K to 2nd grade students will still need to have in classroom instruction, until they learn to read and use the computer for school work.

    This has not been tried to any great degree, due to the teachers union, democrat’s school lunch programs, and the fact that the funding of schools by the state is based on number of students on campus per day.

    One teacher could monitor students from a computer link, answer questions, and give real time instruction. Students could be seen by the teachers by using the built in cams on laptops.

    • There’s a problem with students studying at home—internet access. There are many people who can’t afford the internet access.

      I was in that situation years ago, but I was able to take an old, throw-away laptop that I resurrected using Linux, and go to the library which had wifi. Food for my children came before internet.

      But in this quarantine, children whose parents can’t afford internet, but with school-issued computers, can’t go to libraries to make use of their internet.

    • My daughter just signed the kids up for Khan academy to do at home learning. The public school they were in has not set up anything so she had to go on her own. Her kids are 6, 9 & 11.

  • There is a major change that is going to be forced upon us.
    We are already seeing it unfold before us.
    Change scares many people for it is the unknown of what is on the other side.
    I say dont be scared. Dont try to fight it. Adapt with it. Even embrace it.
    Many people are going to be forced to re-evaluate what is really important in life. The difference between that impulse buy of that newest, greatest electronic device, and putting food on the table.
    We as a nation could come out of this better than what we were before.

    • We really could come out better if we had a bunch of sensible and thoughtful people. My concern is that if people are in a world of pain, they’ll line up for any kind of relief they can get — even at the expense of their liberties, morals and belief system. That is human nature. Unfortunately, we’ve got a lot of looney tunes mixed in with a lot of innocent and vulnerable people. Then we’ve got governments who will probably start scratching at each other for valuable resources. The new normal is going to require us to learn how to navigate through chaos. Hang onto your love because civility may soon be out the door. How I wish that didn’t sound so inevitable.

  • The thing is, there’s being prepared and there’s being prepared. So some people may have put away enough food, etc to last them for a number of months, have a way to heat their home, have garden seeds and know-how, etc yet if this dragged on for 18 months, they’d be in a world of hurt too. Especially so as most people don’t even have 6 months of food etc stored up and many would start looking to grab it from those that did. So this could get ugly if that were the case. So far, so good. But will see how long this goes on for. And most people just don’t have the money set aside to pay rent, mortgages, utilities, property taxes etc for 18 months or so. So even those that put food aside would be in trouble if they didn’t have income coming in.

  • Excellent logical, ethical, and moral ideas suggested in your last paragraph. I like that idea to live the way of giving. It’s better to give than to receive. Yeah, the Supreme Being that created everything, said that.

    The left and godless think it’s bitter to give than to recieve. 😉

  • Here is the best resource I’ve seen to date on the pandemic. There is a CURE, and it is called Vitamin C by IV infusion. It is the only CURE in existence at the moment. It is cheap, and readily available to EVERYONE. It is and will continue to be totally rejected by the Media, Government, and especially Medical Community, simply because it does not involve a prescription drug or a vaccine, and therefore no way for them to profit (or control the masses) from the CURE.

    There are other “good ideas” such as HIV and Malaria DRUGS, but they have limited availability and side effects, and require prescriptions and can be expensive. China discovered the CURE, and imported 50 Tons of Vitamin C for IV infusions and Lypospheric dosing around Feb 4th.

    IMMEDIATELY their infection and fatality rates plunged! The Media, Government, and especially Medical Authorities quickly blamed Mitigation and Suppression measures for China’s success, and avoid any mention whatsoever that the immediate plunge in cases was connected to Vitamin C.

    It is impossible to get accurate information unless you accurately describe the problem: Corona Virus is a BIOWEAPON embedded in a VIRUS. Consequently, you get people dying up front (elderly, and compromised immune systems) from the Virus, and a few weeks later the ones infected – at the same time – die from the Bioweapon.

    The government and medical authorities lump all of the deaths and statistics together, and completely mis-characterize the demographics and statistics. Consequently, they continue to mislead the public! There is a CURE, it is simple and inexpensive, and readily available to everyone. It does not require any medical or government intervention.

    To PREVENT and PROTECT yourself prior to getting Corona Virus, you use measures such as social distancing, personal protective equipment (PPE), and supplements such as Chaga Mushrooms and Selenium (200 mcg/day for adults). However, once you have Corona Virus (COVID-19, etc) you stop taking Selenium and shift to the CURE Protocol, which is Vitamin C by IV. Or Lypospheric Vitamin C until Bowel Tolerance (loose stools).

    This is not medical advice per se, but rather reverse engineering of the problem based upon forensic evidence and a 24 year history of credentialed medical doctors in the Orthomolecular community dealing with BIOWEAPONS and other man-made or man-boosted diseases.

    This is 100% of what you need to know, and it accurately characterizes the Corona Virus Pandemic. Prove me wrong! Don’t troll me, don’t dismiss or marginalize the information, just PROVE me wrong!

    Hal, please post and keep this in a separate location, and let people have access to what they need for a CURE. This information is provided by Gulf War Veterans that have been recipients of multiple Bioweapons during the 1st Iraq War in 1990-91. And CURED by Orthomolecular doctors and their IV infusions, sometimes called “Myers Cocktail.” [Viet Nam Vets had a similar experience with Agent Orange]

    This video that came out yesterday, is a perfect summary of everything the Gulf War Veterans have known for 30 years. Please keep this information up on your site, and share with everyone you know! Due Diligence is called for of course. It has already been done by thousands of people, and in particular Gulf War Veterans who paid the price at the hands of the evil people who invented the bioweapon! Obviously, we know who that is.

    https://www.youtube.com/watch?v=vqypRr-HUow

    – Basic characteristics of COV 19
    – Contagion patterns
    – Progression of symptoms throughout the disease
    – Recipes according to symptoms
    – How you know the cures are effective
    – Chemicals likely to worsen the disease – Sequence of helping

    • Prove you wrong? You are the one making claims, where’s the evidence? Links (no, not some random youtube stuff), actual evidence backed by double blind and peer reviewed studies.

      Here’s my claim: Covid 19 was spread by Santa Clause last Christmas and was created by Elves. Prove me wrong!

  • Daisy,
    I’m thinking back to one of your previous posts about all of this being unreal. What I’m reading now from you is that you’ve turned the corner and you’re facing this head on. I see the resolve. 🙂

  • You are the best cheerleader, Daisy, without being a Pollyanna. That is why I read your posts every chance I can take a break from our home based business. Thank you for being on top of things and thank you for your excellent writing.

  • I have a request. Would you post some news about what is going on in other countries in regards to the severity and response to Covid 19? I’ve been thinking of how our nation’s enemies are watching our reaction to see how panicked is the general response in the US and waiting for our most vulnerable moment to hit us out of left field with something that can continue the free fall economically as well as the general helplessness of our people.

  • “Realise it’s the real deal”? You’re buying into the media hype too then?
    The flu kills more people and we haven’t quarantined the planet or destroyed entire economies over it.

      • People seldom go to hospitals with the flu unless they’re really, really sick. The vast majority of people who get the flu never get tested.

        With Covid-19 people are being sent to hospitals who have mild cases. The fear here is that we’re dealing with the unknown, so the medical response may be overblown. That’s why hospitals may become overwhelmed.

        • No, it’s not. Hospitals are being overwhelmed because they don’t have the ICU facilities and ventilators for all the people who cannot breathe due to the virus. Watch this video so you can understand what’s actually happening.

          https://youtu.be/_J60fQr0GWo

          • I commented on this elsewhere. My DILs twin brother in Seattle was driving all around the Puget Sound carrying on his sales business as usual. He noticed that he was having a hard time breathing, then started coughing up blood. Went to the ER where they said he had pneumonia then they tested him for COVID19 and it was positive. This is a 34 year old strong, strapping young man now in ICU. It happened very quickly.

            Given a little more time, this thing will make the seasonal flu look like a hiccup.

  • We are in Pennsylvania. We are experiencing an essential only business lockdown. National guard and state troopers are in place as of 8 am to enforce businesses and crowd control. A friend of ours told us today to get anything we need of two week supply, per his brother who is in the military they will be shutting our borders down shortly. No deliveries to grocery stores will be made. A friend who works at a local grocery told us tomorrow, Monday is the last known delivery day they will have. I would like some more fresh fruit as I am out but I guess we will deal with canned in the pantry. Not sure I want to attempt the panic at the store. Not trying to spread panic or fear just knowledge. Hunker down friends and stay safe.

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