The measures being implemented by governments across the world to control the spread of the Covid-19 are having devastating impact on the economies. Governments have tried to introduce unemployment benefits and implement fiscal stimulus measures but they seem ineffective. Assessing the needs of the economy and easing lockdown measures is essential to revive the economy.
Raoul Pal, founder and CEO of Global Macro Investor and Real Vision Group, tweeted that negative bond rates are expected to follow as the US has now witnessed negative crude oil prices.
Pal added that the negative bond rates will become a reality regardless of the steps taken by the Federal Reserve.
So, now we have had negative crude oil, are you so sure that we won't get negative rates in the US? I think the bond market will go negative, regardless of the Fed.
Truly extraordinary times. pic.twitter.com/FGNiuFuFxZ
— Raoul Pal (@RaoulGMI) April 20, 2020
Ferdinando Giugliano, an author, tweeted about the taxes expected to be imposed by governments after the Covid-19 pandemic to spread the cost of the crisis.
Giugliano cautioned that governments should be careful in raising the taxes as the Covid-19 pandemic has impacted both businesses and individuals alike. A simple wealth tax may not be the answer to raising taxes rather it should be based on how individuals and companies fared during the lockdown.
After the pandemic, some governments will want to raise taxes to spread the cost of the crisis. They should be very careful in understanding who the losers are. My column for @bopinion. https://t.co/9DgUKApgRJ
— Ferdinando Giugliano (@FerdiGiugliano) April 21, 2020
Stephen Koukoulas, an economist, shared an article that details the views of 122 economists in Australia who have signed a letter against the easing of lockdown measures.
Koukoulas opined that although lockdown was the right response to containing the spread of the Covid-19 disease and saving lives, it also led to the increase in unemployment rate and folding of businesses.
He added that the government should consider implementing strong fiscal measures and gradual easing of lockdown measures to undo the damage caused by the pandemic.
The 122 economists do not look at the health costs of the ‘lock down recession’ in areas outside the COVID-19 space. There is evidence of higher risks of suicide, domestic violence, drug & alcohol abuse from the millions unemployed & in financial ruin. https://t.co/CVihCDoKtb
— Stephen Koukoulas (@TheKouk) April 20, 2020
Pam Herd, Professor of Public Policy at Georgetown University, shared an article detailing the number of workers who have filed for unemployment benefits in Florida. More than 1.5 million workers have filed for unemployment benefits in March but only 3% of them have received the benefits.
Herd noted that the consequences of relying on unemployment insurance are visible with many not receiving payments, while some being ineligible for the benefits.
The economic devastation that will flow from the reliance on unemployment insurance to provide relief is terrifying. And these consequences were easily foreseeable. https://t.co/AbyQVGb59C
— Pamela Herd (@pamela_herd) April 21, 2020