Based on some of these comments, the degree to which so many are out of touch is unbelievable. 17 MILLION people have filed for unemployment and I'm sure this week will be another 6M as companies don't keep this much cash on hand.
Tech's been living in a bubble for a long time and reality is starting to hit. Get out and talk to real people, not your Slack buddies working in SF.
I have to agree with this. People have focused the entire conversation on if/when the virus will slowdown (which is of foremost importance), but there are business fundamentals that have already been stretched. We are already in a recession.
My employer has just furloughed 30% of the company for 6 months. 6 freakin' months. And we were very profitable. This cut was not necessary to maintain neutral profit/loss...they want to keep profits up.
We're a software company backed by a brand name VC in SF. The board is in total meltdown.
Our system rewards people who relentlessly pursue their own advantage at the expense of others. The official talk is about shared sacrifice but the real winners are the ones who make others sacrifice. My company has a lot of problems but I really appreciate that they set out a goal to not lay off anybody. They could easily have laid off a lot of people but they didn’t. This will probably not get rewarded in the stock market but it shows that the company is not run by complete sociopaths like many others.
Those companies that fire people, do they also file for support money from the government? If that is the case, is that fair?
Thinking from the perspective of a country which has actually good worker protection, so not as many people get fired and companies get support in paying their workers.
Speaking from a country that may have one of the best worker protection (France) in the world, it's all smokes and mirrors. If your small-medium business is in trouble, the only sane thing to do for your employees is to layoff as quickly as possible, so they can register to unemployment benefits (and count in statistics).
You think any government is going to give you money as a business owner? Maybe if you're lucky but how much time and paperwork is it gonna take? You're not guaranteed to see any of it or when. Meanwhile, you're accruing significant debt from each employees and suppliers day over day, with no end in sight.
The legislation being enacted's main goal is to keep people employed. The PPP (payment protection plan) is directed at small businesses (< 500 employees) and can be forgiven if it's used toward payroll, rent, etc. In order for the loan to be forgiven, in the 8 weeks following taking the loan out, your employee headcount "cannot decline from average monthly levels during 2019 or during the past 12 months" [1]
Now, the larger company / industry bailouts -- those seem less well-defined. I haven't seen the latest on those but I'm sure the government would _like_ to tie them to employment as much as possible but we'll have to wait to see.
This certainly feels real to me. Yesterday, I was laid off from my job at Easypost. We had a very big and very painful layoff because my company took on way too much leverage. The circumstances of COVID19 were tough to foresee but I really wish we hadn't taken on so much debt while times were good.
I have experience in Go, Ruby, Python and I'm excited to hack again.
> It was no fault of our own because the circumstances of COVID were impossible to foresee.
This is one of the biggest fallacies in modern finance. COVID was merely the catalyst which exposed terrible finances. The idea of unforeseeable black swans has become nothing more than a trope of an excuse that it's lost all meaning. Sure, the pandemic itself is a "black swan" but the subset/collection of events that lend itself to economic disaster is actually not that rare. Case in point: 9/11, Tech Bubble burst, Financial Crisis, Covid-19. This was all in a span of ~20 years.
So let's revisit this: Is economic collapse really that rare? No. But people construct their businesses as if they are, and we always see these house of cards tumble. The other group of businesses who acknowledge the possibility of an economic collapse subscribe to the false pretense that THEIR company is immune because they're so "essential." In both cases, growth at all costs seems to be the mantra. How is this sustainable beyond the Fed Lottery? At this point, it hasn't become a Lottery anymore.
Issue is that system in normal state favors "house of cards" companies. Both as simply value thing, but also in material financial terms.
In values, I have read a lot praise for risk taking over years and rewards for it. I have read comparatively less praise for prudent decision making or what happen when risk part of risk happen. People are said to get rich because they "took the risk" and are poor because they were either lazy or did not took risk. But the part when people take the risk and become poor is never said, as if we wanted to pretend it never happens.
In finances, companies that risk a lot and grow and now are about to fail are way more likely to be saved then a company that was more responsible.
COVID is not a black swan (unknown unknown), but a white swan (known unknown). A looming Coronavirus pandemic was a well known global catastrophic risk.
Nothing personal, but how is it not a company's fault to take on tons of leverage and not have cash reserves? I know this is typical SV growth mindset, but it isn't conventional financial wisdom. Seems to me companies need to get lucky if they go growth at all costs, because if you havent flipped the profit switch before a recession, your balance sheets are too red.
Good point. If I’m being fair I would have to say that the system that encourages individuals to live paycheck to paycheck and the system that encourages companies to leverage to the gills is the same system, and so maybe it is unfair to blame corporations for needing a bailout- they’re just responding in a rational way to their environment. I hadn’t thought of it that way.
But the downside to that is: if in fact you can’t pin this moralistically on bad actors, then you are definitely going to see the same behavior over and over, until policies change.
It is not case that every org, smb, landlord and individual took on too much leverage. Quite a few among those who are laying people off run out of money because their customers are not buying services now or because they were flat out closed.
Which is something else then "my company took on way too much leverage".
Do you have a credit card, a car payment, a mortgage, rent or lease, or a student loan? Can you make payments for several months without a salary? Several years? Literally everything for the last 50+ years is financed with debt, labor doesn't own anything anymore, and it's not possible to opt out of debt and simultaneously compete, which is how we got in this Chinese finger trap in the first place.
I can make payments for a year without changing lifestyle much. That was intentional, I had the option to spend all money.
I never pretended I am poor. I work as programmer and so does my partner. Most people on this forum are not poor. We are comparatively well paid group.
There is debt and then there is excessive debt or "leverage". Ans when management take on excessive leverage so that you fulfill your dream of being big and then company fails, yes it is management fault.
"We took excessive debt and then failed by no mistake of ours" is an oxymoron and illogical statement. That is not nearly the same as debt because your kid would die without it or something like that.
If you look at some of the biggest winners out of '08/'09 it was the institutions with large balance sheets and cash reserves. With earnings season just starting we are able to see the value of a strong balance sheet. Seems to me the macro economic system is rewarding those who bothered with risk management
I wholeheartedly agree with you, but the fault lies with the Federal Reserve, which has been promoting reckless behavior for years now.
Artificially setting interest rates so low (say 1%) that by saving money, you are actually losing money to inflation (real inflation at least 5%, if you include healthcare, real estate and higher education) promotes over-leveraging and that's what we got.
The economy is basically a big network of relationships; employee relationships, business relationships, etc. Unfortunately such relationships tend to break quickly and in a self reinforcing cascade but can only be rebuilt slowly as businesses find that there is enough profit margin and demand to bring new people in, one at a time. That’s why recessions happen quickly and recovery time is proportional to how many people lose their jobs. You look at unemployment data for the last 50 years and the pattern is very simple: a rapid increase in unemployment and a steady recovery. The higher the spike, the longer the recovery. That being the case I would guess that the recovery from this shock will take a decade or more.
Edit: I can’t make new posts. Someone has suggested that people will just be re-hired; historically, that has never happened. Not saying it’s impossible but this would be the first time. You can’t put a broken egg back together; entropy doesn’t go in reverse. The old jobs don’t come back, new ones are created, that’s just the way it works.
Particularly a large portion of the service industry. Perhaps not all with some establishments potentially closing, but most will be called back. Large retail that has closed down as well.
A decade or more? Really? I honestly think that we're going to see a U shaped recovery as the amount of people who want to get out and do things is increasing every day.
The important question is whether the recession due to the lockdown (which is at least useful for stopping the virus) will continue after the virus has passed and the lockdown is lifted.
There will be huge shift in structure of business.
Many small mom and pop shops are not coming back. Big chains, and franchises survive.
Permanent changes in customer behavior. Many people with resistance and habits against 'new ways' are forced to learn internet shopping and delivery. Their habits can change permanently.
The change in habits cuts both ways. I've bought from many small online stores recently as a result of the big retailers (inc Amazon) being totally sold out.
Similarly, I've been buying a lot more from smaller, local stores because the major chains are disasters. It's worth it to pay a few dollars more for groceries to avoid waiting in an hour-long line, for example.
Just as companies are re-thinking the fragility of supply chains that depend on a single country, maybe this will help counter-balance the consumer trends toward huge retail.
wouldn't be so sure. small businesses probably have a somewhat higher ability to go into a sleeper mode where operative costs are reduced to a minimum.
Minimum operative costs are still in the thousands of dollars per month for even the smallest of meat-space businesses. I don't know many hairdressers, nail stylists and massage therapists that can afford $1-3k/mo for the next several months with $0 revenue. Anecdotal, sure, but I have at least one of each of those in my family.
I think of the word "depression" as a lagging descriptor. It means there have _already_ been two to three years of low or negative GDP growth.
Technically, I think it even takes 2 quarters to call a recession.
But I get your point... even if we don't have the stats for six months or two years, we all know where this is going. It's just the standard terminology doesn't help right now.
This makes sense to me, but people are talking about it in future-forecasting terms already ("this will have been..." etc), might as well start facing the music in those future-perfect statements and say it will probably have been a depression.
A recession is two or more quarters of negative economic growth in a row.
A depression isn't clearly as defined, but some common definitions are "a 10% decrease in real economic output" or "a recession lasting more that two years"[1].
Healthcare and Technology sectors are probably on the way to all time high in output shortly. The US is a large player if not the largest in both of those sectors. We'll see a big hit but I think these sectors will be able to prevent a recession
How is it a depression if it's only been a few months? Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression?
An unemployment rate of around 13% (as of two weeks ago[1], so probably even higher now) doesn't seem like it's going to just magically resolve itself, and it's going to have drastic effects.
>Be warned, these numbers yield an imprecise estimate of today’s unemployment rate, and the truth could easily be quite a lot higher or lower. This is not an estimate of the official unemployment rate for March, which reports the state of the economy a few weeks ago when the labor market was in better shape, nor is it a forecast for the official rate in April.
I don't find it useful to implicitly embed a financial forecasting model in the use of the term "depression".
>Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression?
I wonder how they get those numbers. At least half the US economy is in shutdown right now. Two months of that is equivalent to one month of the whole economy being shutdown; to 1/12th of annual GDP lost, or around 8.3%. Add another month and its 12.5% of output lost.
They don't describe the actual algorithm used for the calculation there, but they do state they're assuming 8% of work days lost for countries experiencing a pandemic, 5% for other countries. So I suppose if they assumed 5% work days lost for US, and otherwise 2% GDP growth for the year, then they could get a number around -3%. Only 5% of total workdays lost sounds quite optimistic to me though.
As a total dummy on macroeconomics, I find myself having the positive take "hey, we were probably moving towards some recession anyway, might as well get it over with in one go". I'm saying this because the graphs go up again in the not too distant future. Besides the obvious personal suffering that is going to be the consequence of this event on at least the short term, and under the uncertain assumption that we're making some return to normal life in 2020, is there any merit towards my naive optimism?
hey, we were probably moving towards some recession anyway,
That's a take that is gained from reading two many doom and gloom writers and not looking at the data.
The data shows that economies - on average - expand and have done consistently, long term since the renaissance.
Once you look at that, you see recessions as mistakes. Most large ones since the start of the 20th century have been caused by errors in the capital markets (1929, 1987, 2008) or commodity price shocks (1970s).
Perhaps the run up in stock prices should have been corrected. But that would have been a recession caused by a financial market correction, so another 2001 "dot com crash" style thing. Nothing like this.
is there any merit towards my naive optimism
By most measurements this is the biggest economic shock since 1929 (and possibly larger). It's the first time we've have economic activity stop this quickly across so many industries all across the world ever (perhaps the black death in the 1300s was similar because many farms went unharvested because of the lack of labor - up to 80% of people died in some areas[1]).
It's possible this will turn around quickly. We certainly stopped things quicker than I would have believed was possible a 4 months ago.
But provided you understand that is an optimistic view and isn't really supported by history it's ok.
True that economies generally grow with time, but that doesn't mean the prices of stocks match reality. Prior to corona, the Dow Jones was nearly double it's value from 2016. Did the US economy really nearly double in value since 2016, or was there a mismatch between price and reality?
Honestly, I'm not an expert. But before coronavirus, the wild growth in the markets seemed--to me--out of line with the realities of the economy.
Sure I think that's a reasonable case to make. We could have - at some point - had a correction in the financial markets which might have caused a 2001 style disruption or maybe a 2008 recession.
But this is nothing like that at all. A stock market crash takes months to move through the economy.
A big crash means things like 700,000 new unemployment claims (2008 had that many at its peak).
The US just had 6 million new unemployment claims.
this is also different because there isn't an economic causal factor. we intentionally stopped everything. that didn't happen in 1929 or 2008 or the 70's, we collectively got together and said shut it down until we get a hold on this disease
> this is also different because there isn't an economic causal factor. we intentionally stopped everything.
Yes we intentionally stopped things, but that would have happened either way as the disease spread and people got sick.
Look at the meat packing plant in SD where 1 case turned into ~300 and they had to shut down [1]. If we had not shut down things, that would be the story at workplaces across the country. Think about schools and universities throughout the country. If they had not shut down as the pandemic was ramping up, they would have become breeding grounds for the disease and would have had to shut down anyway as students and teachers fell ill.
Yes we shut down things intentionally but our hand was forced. The flip side of this is we cannot re-open things just as intentionally because the result will be a flare-up of cases. So while it may seem like we have control over when we start/stop the economy here, really the virus is controlling the timeline.
I can't find the studies at the moment but there's at least one looking at previous pandemics that supports your suggestion. They found that economies that instituted weaker public health responses had bigger casualties from illness directly, and longer times to economic recovery because of bigger losses in personnel etc.
I wonder if lack of public health infrastructure in the us will come to haunt it in the coming months as other countries recover faster and get a head start. That sort of economic opportunity cost from not having more public health infrastructure tends to have been left out of past discussions completely.
The lockdown isn't the only reason for the current economic crisis. Look at what was happening in the repo market a few months back before Coronavirus was even a thing.
I thought the repo market was mainly due to regulation drying up liquidity in that market. It didn;t seem to me like a larger concern. What are your thoughts on it?
What regulations are you referring to? I didn't look to deeply into it but I interpreted it as companies wanting to hold cash more instead of lending because they expected a crash.
I mean, by default, any economic crisis is always going to be worse than/bigger than the previous, just due to growth. Am I wrong for thinking this way?
This sort of thing is usually measured in percentage lost from the previous peak, or some other relative measure that corrects for the overall growth over time.
I'm not even talking about econometrics. As our supply chains become more and more integrated globally, as the amount of services built on top of each other continue to grow, and as the global economic system continues to use, build, and develop these services, any significant disruption is going to be more catastrophic than the previous which didn't rely on as much integration as it currently does.
and not accounting all the stuff we have accumulated, which (at some point) has/had a lifespan of multiple recessions. But hey, just picture these hungry, ragged children - some Covid deaths are just to be accepted with thie outlook.
> That compares to a January projection of 3.3% expansion and would likely mark the deepest dive since the Great Depression. It would also dwarf the 0.1% contraction of 2009 amid the financial crisis.
Growth would have an impact on the decline in absolute dollar values (inflation adjusted or not). But wouldn't have much of an impact on relative decline measured in percentage.
Nobody knows for a fact how this will turn out, and if they say they do they are lying and vastly overestimating their own knowledge.
There are no modern equivalents to compare to, so the best thing we have is the Great Depression; but when you look at the circumstances, it's not exactly a comparison that gives you a lot of confidence.
First of all, the GD had purely financial causes. Over-speculation in the stock market, high debts, combined with a struggling agriculture sector. As reality dawned, a mass sell-off took place that snowballed into what we now know as "the Great Depression".
If we for the sake of argument assume that what's happening now is exactly what happened during the GD, you still have to take into account how different the world is today. We are no longer in a mostly industrial, manufacturing economy. Our capacity for producing everything that keeps people alive is higher than it has ever been, which is another way of saying that our economy is more efficient than it has ever been. This is why most people can "get away" with not producing essential goods: many, many people work in "non-essential" jobs (for survival) like the service sector.
The only sane thing to say right now is that noone knows exactly how this will turn out, but saying that things will be worse than the GD is not only saying that the circumstances are way worse (that's absolutely not obvious to me), but also that our economy is weaker than it was 100 years ago, which to me sounds quite absurd.
Oh come on guys, I know that was a flippant comment but you see my point right? Due to the short term election cycle every politician has an incredibly short time horizon; in this case trump is trying to make things go back to normal by November and it’s just an impossible task. So the only thing he can do is massive stimulus and prayer.
I guess this being HN people are more used to long winded soliloquies than single sentence terse remarks, served me right I suppose.
The stock market is commonly considered to represent what the economy is expected to look like in 6-12 months.
If we assume a sharp downturn in Q1 and Q2 of 2020 and a subsequent uptick and prolonged recovery in the second half of 2020 and continuing in 2021 that pretty much corresponds to how stock markets have been reacting over the past few weeks.
Well, while I don’t disagree that the current “Whatever it takes” influx of money helps with propping up the market right now there’s nothing that inherently prevents the economy from growing again once the immediate crisis is behind us.
Make no mistake, there will be huge shifts and upheavals, regarding the ways we work and buy stuff for example.
Many of today’s incumbents might not exist anymore in two years’ time but there’ll be others to take their place.
You make sense, unfortunately our "market" economy does not.
Many of today's incumbents WILL exist in two years' time, because they are the recipients of "helicopter money" to prop them up, even if they deserve to die.
The real losers will be small and medium businesses who will get some token (not enough to survive) help, so that politicians can claim that everyone was helped.
I don't know how anyone can trust the stock market right now. We're living in unprecedented uncertainty and on top of that, [literally] everything's closed and no one is buying anything, how can the economy possibly be growing like the market right now?
Compared to the begging news wave that everyone was going to get infected and millions of death per state, an 11M city going into lockdown was definitely priced in
I don't disagree with you that the stock market is inflated, but remember that stocks should be valued by looking at the estimated sum of their future cash flows, not just their current cash flows. And this is relative to a riskless cash flow, like e.g. treasuries, which are controlled by interest rates.
How long are people expecting these companies to stay in business?
I think people are just buying in now while things are cheap and that's leading to a "recovery". Particularly given the longer the run the more risk averse cash you attract while prices are discounted. I bet there's another "crash" coming.
I'm not sure enough to short my money where my mouth is though, so to speak.
Shame people can't have stocks without actual jobs and salaries to buy them in the first place, and even that after they first need to feed and shelter themselves...
I don't think parent comment means "why don't all these poor people just sell a few of their shares, they'll be fine". They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline.
(I'm not saying that I think the stock market is a good indicator of future economic growth and actually even the parent comment didn't explicitly say that.)
>They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline.
I'd say the stock market value reflects traders' short term opportunistic view of what they can make in the stock market - especially with a huge stimulus package landing. So basically a bet on companies, not on working people income.
Whether millions will be added to the jobless and new poor, is not much of a concern for such a bet.
Companies are ultimately dependent on working people income because in the absence of big government, companies are ultimately dependent on consumer spending.
The unemployment rate isn't even close to the 10% we saw after the '08 recession. Only about half. Does that mean that twice as many people are going to become unemployed, than are right now?
We won't have the numbers for sure until the end of the month, but based on the insane spike in initial claims [0], the US probably hit 10% last week [1].
That said, the past two weeks the claims seem to have hit their processing limit, with people still not getting through - it's guaranteed to continue rising for the rest of the month, past the numbers I have here.
[1] 3.3 million + 6.8 + 6.6 = 16.7 million, 16.7 / 160 million (number I've seen for estimated working-age people) = 10.4%, 10.4% + 4% (previous unemployment rate) = 14.4%
Quick edit, unemployment rate is updated monthly here: https://fred.stlouisfed.org/series/UNRATE - based on when it updated, that 3.3 million is already included in the 4.4%, so actually more like 4.4% + ((6.8 + 6.6) / 160) = 12.8%-ish (and more than likely still rising)
Unemployment numbers are updated monthly. The last batch of unemployment numbers were computed just before the US saw three successive weeks were new employment claims shattered records. Prior to this year, the record was about 800,000 in one week. Over the last three weeks, first 3.3 million, then 6.9 million, then 6.6 million have filed new claims. That's about 10% of the country who have become unemployed since the last monthly numbers came out, probably the steepest rise in unemployment in history.
On the other hand, new streams of revenue as well as increases in existing revenue streams are emerging as a result of the lockdowns.
The question is, will these increases fully offset the permanent loss of existing revenues + the cascading costs of disruption due to things like job losses.
>On the other hand, new streams of revenue as well as increases in existing revenue streams are emerging as a result of the lockdowns.
For extremely fewer people...
>The question is, will these increases fully offset the permanent loss of existing revenues + the cascading costs of disruption due to things like job losses.
To expand a bit on how to think about the problem in general:
Don't focus on revenue when looking at the situation, focus on productivity and what people can and do produce.
A few people are busier, some are just as busy as before. Most are less busy and severely restricted in what economically useful activities they can do.
Sorry what? Are your numbers the world or US? In either way I think it's just impossible, no? There can't be hundreds of millions of deaths in the US due to starvation after this I don't think I need to justify this claim. (if you disagree let me know) and I'm willing to bet that death from the disease in the whole world is more than a million easily. OK so the only possible interpretation is you're saying the shutdown is going to kill a lot of people from economic effects in poorer countries? I think this is nonsense. The shutdown is most prominent in richer countries, where it's unlikely to cause massive deaths to starvation. Whether the economic effect has a large toll or not, it will not be 3 orders of magnitude more than the disease, that's just hogwash.
My guestimates were indeed for the world and I expect most deaths to occur in less developed countries.
Economic slowdowns cause some states to fail, leading to civil wars, refugee cities, and famines and other diseases spreading. Thats where most of the deaths will occur.
How do people die from an economic slowdown? Maybe in poor countries but I don't think in a developed country an economic slowdown should kill anybody.
I find myself less interested in whether or not something is a recession or not. I mean, sure, the numbers of the economy are going down, but the big numbers don't necessarily mean much for anyone's personal life. Of course it can; losing your job is no fun. But the big reason why the Great Depression was so bad, is that we didn't have any social security back then. Unemployed meant having no income at all. No health insurance, no pensions, none of the things that people started fighting for exactly because of the Great Depression.
And because of that, these recessions and depressions are far less devastating than they used to.
Of course I'm saying this living in a rich country that does have all of these amenities; in poorer countries that don't yet take care of their poor (and possibly the US that chooses not to take care of its poor), things may still feel like the 1930s. But in a rich, well-organised country, there's really no need for that anymore. We can easily get through this is we want to. Skip a vacation, buy a luxury item less, make sure the poorest don't fall through the cracks (and there will be more cracks of course), and we'll be fine. The misery is mostly a political decision.
> We can easily get through this is we want to. Skip a vacation, but a luxury item less...
Wow that is pretty out of touch with reality. If you have a household where two people were all of a sudden out of a job at the same time with absolutely no warning or preparation, having to pay for two kids, a mortgage and no prospect to find a job in the next few months then I'm afraid skipping a vacation or not buying a luxury item will not cut it! And this shit doesn't just happen to the poor. If you are a restaurant manager on a high salary but all of a sudden the restaurants are forced by the government to be closed and before they are allowed to open again might have gone bankrupt, and the other person is in a high paying office job (fashion buyer for a big brand) and has been sacked because the entire fashion industry is having a fucking heart attack now then both people might be out of work for nearly a whole year before they can get back to anything like what happened before our governments decided to completely shred our livelihoods to the grounds for some yet known overall good. These people will be fucked for years and can be lucky if they are not going to loose their homes, get divorced and become alcoholics.
Sure, but that's why we need to take care of each other. Poor countries may not be able to, but wealthy countries absolutely are. Of course choices need to be made, but the choice not to help out those who are hit hardest by this, is a political choice. It's not an inability to help.
Of course there are countries, like the US, that seem eager to fuck this up, but again, that's a political choice. There's no doubt that the US has the economic capacity to get through this if it wants to. The problem is that its political class has other priorities.
In Netherland, people who lose their job still get paid. Restaurants survive by switching to delivery. Some companies may go bankrupt, many people will have to take a step back in their lifestyle, but overall, life here has been pretty good, and we have that leeway to make that step back.
That doesn't mean nothing will change once this is over; I think and hope a lot of people will reassess what's important. I hope we'll pay the people in these "essential jobs" better than we've done so far. And I hope people will learn to appreciate the essentials of life more and be less eager to get back into the rat race of status and useless crap. But we do have a lot of useless crap in our society that we can easily cut back on without letting anyone fall through the cracks.
In western Europe at least. I'm well aware that some other countries love rugged individualism for the poor and care more about bailing out the rich. But again, that's a political choice.
If people aren't working and creating a functioning economy, all of those things you described go away. They're tax-dependant. They aren't just whistled up from the wild blue yonder.
I think you are underestimating the effects of real depression even in a wealthy first world country. Finland went through depression in the 90s when the Soviet Union collapsed and it left behind a cohort of people who never really recovered or gained employment.
You seem to think that being poor in a first world country is just skipping few vacations and luxury items but otherwise life can be wonderful. I think you severely underestimate how poor people can get even in countries with strong social security, like the nordic countries.
Also the idea that misery is mostly political decision sounds just silly. Most of Europe hardly recovered from 2008 financial crisis and are already cracking under the demographic shift, baby boomers retiring. Add a covid depression into the mix and things can get really bad. There's just not enough money in the economy to share for both the retirees and a large number of unemployed. This can cause a vicious cycle as the increasing social spending will increase taxes, increased taxes will go to increased labour cost, increased labour cost will drive down demand on European goods increasing the unemployment even more etc...
There's always a cynic to rain on your optimism :)
Look into unemployment system tech. In my state, its physically impossible to access it. Whenever you call or go online, it is straight up broken and dozens of contact attempts have yielded nothing.
Our economic system is not nearly robust enough for these suddenly 5-10% unemployed and underemployed citizens. We can not "easily get through this if we want to".
I can't speak to the states, but as a Canadian, my wife and I tried to tackle the communication problem together - it took us a collective 550 calls over the day to even make it to the "on hold" queue, and I'm pretty sure making into the queue was purely by luck - my wife continued trying and never got through. The system is completely overwhelmed.
That's a really good point. Even if a society technically has the resources to take care of everybody, a big disruption can still threaten access to it. As much as I'd like to see western/northern European countries as fairly well organised in this regard, government sites are crap everywhere.
Tech's been living in a bubble for a long time and reality is starting to hit. Get out and talk to real people, not your Slack buddies working in SF.