The rate at which the U.S. economy is unraveling is absolutely
breathtaking. On Thursday, we learned that another 4.4 million
Americans filed new claims for unemployment benefits last week, and that
means that a grand total of more than 26 million Americans have lost
their jobs during this pandemic so far. To get an idea of just how
dramatically this record-setting unemployment spike dwarfs what we
witnessed during the last recession, check out these charts.
Prior to this year, the record for new unemployment claims in a single
week was just 695,800, and now each of the last five weeks has been at
least four times larger than that old record. And as I discussed in an article earlier today,
millions of those workers have absolutely no incentive to go back to
work any time soon, because thanks to Congress they are bringing home
more money now than when they were actually working. So even if efforts
are made to return the economy “to normal”, millions of workers will
want to stay home until the $600 per week “unemployment bonus” finally
expires. The sad thing is that this new economic crisis is largely a
self-inflicted wound, and I will explain why that is true later in this
article.
But first let’s talk about where things currently stand. Based on
the unemployment claim numbers that we have been seeing, experts are now
projecting that the current rate of unemployment in the U.S.
“is about 16 percent”…
With a labor force that totals about 162 million people,
the claims figures suggest the unemployment rate is about 16 percent, or
roughly one in six Americans — significantly higher than the 10 percent
peak seen during the 2008 financial crisis. The previous one-week high
for jobless claims was 695,800 in 1982.
For a long time I have been warning that the next crisis would make
the last recession look like a Sunday picnic, and now that has actually
happened.
In addition to an unprecedented number of initial claims for
unemployment benefits, we have also absolutely smashed the all-time
record
for the number of “continuing claims”…
A person who has filed an “initial claim” for
Unemployment Insurance (UI) and still doesn’t have a job a week later is
added to “insured unemployment.” The number of the “insured unemployed”
– often called “continued claims” – skyrocketed to 15.98 million, by
far the highest in the history of the data series. The high before this
Covid-19 era was 6.63 million in May of 2009.
And now that Congress has given workers a tremendous financial
incentive to stay unemployed, the number of “continuing claims” is
likely to keep going higher with each passing week.
Of course this isn’t just happening in the United States. Over in Europe, business activity is falling
at the fastest pace ever recorded…
“The eurozone economy suffered the steepest falls in
business activity and employment ever recorded during April as a result
of measures taken to contain the coronavirus outbreak,” it said.
The company’s purchasing manager’s index (PMI) dived to a record low
of 13.5 in April, from the previous all-time low of 29.7 in March,
confirming private sector gloom that is savaging the 19-nation eurozone.
To put those numbers in perspective, any reading below 50 indicates a contraction.
Needless to say, these absolutely horrific statistics are the result
of the coronavirus lockdowns, but were these lockdowns actually
necessary in the first place?
As I discussed
yesterday,
the only reason why any sort of a lockdown should be implemented is if
the hospitals in a particular area are being overwhelmed, because if
people are unable to get medical treatment that could definitely push
the ultimate death toll from the pandemic higher than it otherwise would
have been.
But in most parts of the U.S. and Europe right now, hospitals are not being even close to overwhelmed.
Keeping everyone at home is not going to defeat this virus or end
this pandemic. When you are dealing with a virus that spreads from
person to person this easily, there is no way that you are going to
contain it. In fact, the U.S. just had 31,900 newly confirmed cases in
the 24 hour period that just ended even though most of the nation has
already been locked down for weeks.
Yes, these lockdowns have temporarily slowed down the spread of the
virus, but the lockdowns have also extended the duration of this
pandemic. Ultimately, this pandemic is never going to be over until it
sweeps through the population and “herd immunity” is achieved. And as I
discussed
yesterday, 70 to 90 percent of the population is going to have to develop antibodies in order to get to that point.
And if you are waiting for a “vaccine” to get us out of this mess,
you are going to be waiting for a very, very long time. There has never
been a successful vaccine for any coronavirus
in all of human history,
and the task of trying to develop one for COVID-19 has become
exceedingly more difficult now that scientists have discovered that
there are 30 different strains of the virus.
So the truth is that this outbreak is going to rip through our
population, and nothing that our politicians can do will be able to stop
that from happening.
But the good news is that
new numbers from New York seem to indicate that we are closer to “herd immunity” than we previously thought…
Preliminary results from New York’s first coronavirus
antibody study show nearly 14 percent tested positive, meaning they had
the virus at some point and recovered, Gov. Andrew Cuomo said Thursday.
That equates to 2.7 million infections statewide — more than 10 times
the state’s confirmed cases.
The study, part of Cuomo’s “aggressive” antibody testing launched
earlier this week, is based on 3,000 random samples from 40 locations in
19 counties. While the preliminary data suggests much more widespread
infection, it means New York’s mortality rate is much lower than
previously thought.
However, another study that was conducted in L.A. County found that
only 4 percent of their residents had developed antibodies, and that is probably more representative of the nation as a whole.
In any event, everyone agrees that the vast majority of the U.S.
population has not developed antibodies, and that means that there will
be many more cases and many more deaths in the months ahead.
And that is going to happen no matter how our politicians respond to this crisis.
So as long as our hospitals are not being overwhelmed, there isn’t a
need for any lockdowns. The final case total and the final death toll
will be roughly the same whether there are lockdowns or not.
But these lockdowns are definitely killing our economy, and tens of millions of American workers now find themselves unemployed.
And if we continue to try to keep the U.S. economy shut down for a few more months, the economic damage will be incalculable.
Please don’t misunderstand what I am saying. I am not saying that we
should sacrifice lives in order to save the economy. What I am saying
is that about the same number of people are eventually going to die
whether we have the lockdowns or not. And if we can’t handle this, how
in the world are we going to deal with
what else is coming?
If you are elderly, have a compromised immune system or are in some
other high risk group, you are going to have to quarantine yourself for
the foreseeable future, but that would be true whether there are
lockdowns or not. The mortality rates for high risk groups are much,
much higher than for the general population as a whole, and the danger
is very real.
But everyone else should be allowed to get back to work, because most
of the population is eventually going to catch this virus no matter
what we do. As long as our hospitals can handle it, we should proceed
with life as normal.
Unfortunately, that isn’t going to happen. Most of the current
lockdowns are going to remain in place for quite some time, and this new
economic depression is just going to get deeper and deeper.
About the Author: I am a voice crying out for change
in a society that generally seems content to stay asleep. My name is
Michael Snyder and I am the publisher of
The Economic Collapse Blog,
End Of The American Dream and
The Most Important News,
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The Beginning Of The End,
Get Prepared Now, and
Living A Life That Really Matters.
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