When you lock people down (to save their lives), you inevitably close down a lot of the economy as well.
And the lockdown will definitely have to last in most countries until May or June — Donald Trump’s promise of a “beautiful timeline” to reopening the U.S. economy just two weeks hence being delusional.
So where’s the money coming from in the meantime?
The majority of people still have jobs they get paid for: people in essential services who have to go to work, people who can do their work from home, and quite a few others as well.
However, between a third and quarter of the employed population has been left idle as their employers, from airlines to retail businesses, downsize or shut temporarily. If you leave these people without income, then you are reproducing the conditions of the Great Depression of the 1930s when unemployment peaked at 24 per cent in the United States and the country’s GDP shrank by almost half.
Adolf Hitler came to power when German unemployment reached 30 per cent. Misery and desperation can lead to violence. Nobody wanted to see that movie again, so after the Second World War every developed country created a welfare state to shelter its population from the worst effects of the business cycle.