The Government’s Pandemic Strategy Is a Reckless One
The current coronavirus strategy of most governments is a recipe for a worldwide economic disaster. In many countries, the strategy of confinement and forcing shops to close is a surefire path to large-scale business failures. The cascade of economic and financial repercussions to come is likely to lead to another Great Depression. Italy, for example, already had a 135 percent debt-to-GDP ratio before the crisis. It is hard to imagine how it will be able to borrow more without mutualizing its debt with the rest of the EU—something the northern European countries are still strongly opposed to. The European Central Bank is already printing money like crazy, and if Italy becomes another Greece, the ECB will make it ramp up the printing presses even more.
The media and politicians have taken to repeating many sensationalist claims that overstate the risks of COVID-19. To save lives in the short term, nearly the entire population of Europe is currently being held under house arrest and many businesses have been put into a preliquidation state, no longer able to realize a profit due to inactivity. The current strategy is not to stop the virus in its tracks but rather to spread the rate
Article from Mises Wire