Being an Economics Graduate, the most common question I receive is, "Is, actually, lockdown gonna hit the economy really hard? How can we overcome? Like, in this current scenario, how will the world adjust between life and livelihood?"
I tried to answer that in article below-
People run the economy, Money makes people work. It's not a world where everyone would provide selfless service. We need to pay to get something. We need to work to earn the payment we need to make. So, the trip, a monetary value makes, plays a vital role. Under current scenario, velocity of money has slowed down. Only a few sectors are running, rest aren't able to earn income. Individuals are willing to save for their livelihood. More the savings, less the investment. The rate at which money exchanged hands has fallen. So, productive activities don't get the required boost. Most people aren't earning so they don't spend lavishly. So, the GDP number falls. For many it might be just a number but it reflects the slowdown. Economy faces a hard hit from two sides- (1) the number of workers (population) is declining, (2) people aren't willing to spend. If there are less people, it doesn't only mean less burden but also less helping hands. Economy runs by cooperation received from every sector. Secondly, most aren't earning. As their wealth declines, their livelihood faces danger. Initially, people might help. But, for how long? So, another scenario emerges where part of population is becoming slave! The ones who would have enough will try to use such people who seek livelihood during difficult times. All this is happening because money runs livelihood!
More the individuals get affected, more pressure is created on economy at global level. The people who are dying, both skilled and unskilled played an important part in running the economy. The world doesn't stop by someone's absence, but definitely it could be made a better place by utilising someone's presence! So, economy, livelihood, welfare, health faces a hard hit.
This virus won't go in blink of eye. It will stay with us and we have to work keeping that in mind. It's not easy to overcome. If we think to make the world go digital, we must know that all services couldn't go digital. So, people who need to step out have to take a risk of their life and take necessary precautions. Everyone who has arrived has to go but that doesn't mean 'purposely risking lives'. So, the ones who could do their part staying at home should do and avoid crowding places. There are people who still think that lockdown isn't meant for their good! We live in a world where everyone (including us) won't understand everything. So, any day when this lockdown has to be lifted up, crowd will be seen on streets and all the efforts made during this period would go useless. So, it's difficult to overcome as everyone doesn't understand. People must voluntarily follow the rules to break the chain. Unless, everyone cooperates, it will be difficult to overcome. We have to live with the mentality that the virus could be anywhere around us! A balance between life and livelihood has to be created voluntarily.
Policy makers do provide the relief tools, but we must help ourselves too.The government may provide subsidized credit, but unless we utilize it properly it would go in vain. Well-targeted instruments would be needed to lift up the economy. In a country where people don't have money to eat, money for treatment but are rich enough to buy liquor at high price, how sharply the targeted instruments could be targeted?
Nevertheless, we must voluntarily follow the rules to avoid counteraction with this invisible creature till the time science and technology doesn't gift us a remedy. But, probably, this gift may require money boost too! Amidst the slowdown, the ones who are working selflessly (or charging meagre amount just for their livelihood) for the welfare of humanity are the ones whom we should be really thankful to. We need such people for a fast recovery! But, they are rare.
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