
US economy suffers worst quarter since WWII as GDP shrinks 32.9% - LinuxBender
https://www.theguardian.com/business/2020/jul/30/us-gdp-economy-worst-quarter-covid-19-unemployment
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sadfev
I have to say I was wrong when I thought strict lockdown wasn’t necessary in
April-June.

US suffered catastrophic GDP shrinkage without even the benefit of pandemic
being manageable.

It would have been preferable to have a even more catastrophic Q2 and slow but
steady recovery from then on.

Now this constant start-stop isn’t helping the economy recover while the
pandemic is still wrecking havoc!

COVID-19 exposed every level of inefficiency and incompetency in governance,
healthcare and public discourse in USA

~~~
NotSammyHagar
Thanks for sharing a potentially embarrassing opinion. What changed in your
thoughts between then and now, what convinced you to change? We can still do a
couple of month shutdown and stop this thing. But there would be more
political resistance than ever, because we are stupid as a collective society
in america. I'd like to understand what impacted your thinking, maybe we can
replicate that in explaining the situation.

~~~
sadfev
I had more faith in the medical infrastructure of the US and common sense of
the populace!

How wrong I was! I had no idea how woefully underprepared hospitals were for
ANY kind of emergency.

Who in the actual world has a coronavirus party? The lack of policing when it
came to stop crowds (ironic right?), the strange refusal to wear a mask, the
bizzare and blatant apathy.

I could list many things but I have to say, the federal and state governments
completely dropped the ball when it came to tracing and enforcing quarantine.

I was reading how Sweden, Germany and South Korea handled the initial
pandemic. Now even the hardest hit countries like Spain and Italy are faring
very well.

Sweden didn’t close the country at all and relied mostly on voluntary
confinement/quarantine though the strategy has been criticized for not
protecting elderly but there isn’t a total economic shutdown or untamable
level of pandemic.

US got the worst of both worlds mass unemployment, screeching slow economy and
uncontrollable intensity of pandemic.

~~~
mycall
There is a shared blame to go around to all the science deniers, "news"
organizations included.

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jdm2212
It shrunk at an annualized rate of 32.9%, which means it actually shrunk about
8%.

If it actually shrunk 32.9% in one quarter, we'd not only be way beyond Great
Depression territory but actually into full-on collapse of society.

~~~
radford-neal
Right. This mis-statement is endemic in financial journalism.

In ordinary circumstances quoting the change in terms of the annual rate of
change is useful - provided it's correctly described as that! - but in the
present circumstance it makes no sense. Nobody is expecting a new pandemic
every quarter, so that the 9.5% drop this quarter will be followed by another
9.5% drop next quarter, and so on indefinitely...

~~~
thephyber
It's only a mis-statement in the headline because headlines are always edited
for brevity. The first paragraph makes the specific unit of the number clear.

~~~
Fjolsvith
I'd still classify it as click bait.

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anm89
Its crazy to me that gdp only shrunk by 9 percent for the quarter. Thinking of
the fuel that wasn't used, the entertainment services that weren't consumed,
the non essential shopping that wasn't done and then all of the side effects
like reduced financial transactions on the other things that didnt happen,
it's crazy to me that that wasn't more than that.

Thinking through this does help me to see why you have to annualize if you
aren't doing a quarter to quarter comparison.

~~~
lippel82
No, wait, compared quarter to quarter it really did decrease by 32.9%. The
9.5% is what would be missing if suddenly everything went back to normal.
Which it won't.

~~~
nkurz
I don't think that's true. Or maybe I misunderstand you?

The US GDP in constant dollars [1] went from $19.0 Trillion in 2020Q1 to $17.2
Trillion in 2020Q2. The number for 2019Q2 was also $19.0 Trillion.

Isn't this a 9.5% decrease from both the previous quarter, and the same
quarter in the previous year? Is there a way in which this read as a real
32.9% decrease?

[1] [https://tradingeconomics.com/united-states/gdp-constant-
pric...](https://tradingeconomics.com/united-states/gdp-constant-prices)

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mensetmanusman
For those curious, that is a loss of about $10,000,000 per covid death.

~~~
lippel82
From an economists point of view, the thing to compare to would be cost per
prevented death. I don't have a current estimate for that, but it is
presumably much lower.

~~~
mensetmanusman
They are both interesting numbers. Prevented death is interesting, since we
had a huge shutdown with the same outcome as Sweden, hah

~~~
maxerickson
Sweden is also having a big recession. Economies are in poor shape anywhere
the virus is prevalent, it isn't just government policy that is impacting the
economy.

~~~
mensetmanusman
If the US has a recession, Sweden will too...

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Synaesthesia
It’s a worse recession than the Great Depression or any war AFAIK.

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detaro
duplicate:
[https://news.ycombinator.com/item?id=23997362](https://news.ycombinator.com/item?id=23997362)

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Dahoon
32%. About the percentage of effectiveness of the government's handling
perhaps?

~~~
mensetmanusman
Compare covid weekly deaths per 100,000 capita over time to see the effect of
different government responses.

~~~
thephyber
Comparing different governments means comparing different cultures of people
as well. It's not clear if comparing the same government over time is
isolating government response, medical learning, environmental changes, or
cultural changes among the people.

America's biggest failure against COVID was to not take it seriously enough at
the citizen level. The government response failed when we didn't have a quick
test rolled out quickly and even after we realized that was our problem we
still didn't get a same-day test rolled out at scale.

~~~
mensetmanusman
The govt. response ‘failed’ in so much as it is prescribed goals that each
citizen is free to prescribe.

The curve has been flattened from the peak. Without a vaccine, all models
point to >50% of people getting infected. Vaccines are not for sure going to
even exist. The only known short-term vaccine is surviving covid.

~~~
rayhendricks
The government response in the USA might have failed. The response by by other
governments [TW/NZ/ROK/JP] are keeping the virus under control without a
vaccine, and if we had a national mask mandate along with a new CCC-like
program for contract tracers then we could also have much less than 50%
infection.

However Trump will probably be re-elected, Obamacare will be overturned with a
new SCOTUS pick when RBG dies in a couple months, and corporations will get
immunity to COVID lawsuits from employees. Just my prediction.

~~~
mensetmanusman
Aerosol transmission is leading cause for indoor superspreader event, ergo N95
masks are required when someone is indoors for an extended period of time.

The govt. response failure is from the fact we weren’t making N95s at full
production for the past decade plus to prepare for this.

