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Zebras in Africa have a problem. They have to drink water to survive, but they haven’t mastered the science of plumbing. And because of this dearth of technical know-how, they can’t transport potable water to a safe location, and they have to subject themselves to the terror of crocodiles.
Zero Zebra Deaths Aren’t an Option
Zebras, I’m sure, would prefer a world in which no zebra was ever eaten by a crocodile. But in order for that world to exist, every zebra in Africa would have to forego drinking water. Not good. Every zebra foregoing water would mean the extinction of the zebra species. The lack of plumbing skills has thus forced upon our zebras a very lamentable choice: drink water and suffer crocodile deaths, or don’t drink water and suffer many more dehydration deaths. And as the above video grimly attests, zebras have chosen a smaller number of crocodile deaths over a larger number of dehydration deaths.
Is the Coronavirus Our Crocodiles?
Sadly, I think the coronavirus and our profligate ways have placed us in the same predicament as zebras. Consider the following:
- In order to survive, human beings have to work. Work is what brings food to grocery stores, water to faucets, clothing to retailers, electricity to outlets, gas to gas stations, and medicine to hospitals. And work is what is done to earn the money that facilitates the trade we need to conduct with grocery stores, water companies, retailers, electric companies, gas stations, hospitals, and all the other providers of goods and services that we rely on in a modern economy.
- The half-life of work is very short. In other words, the beneficial results of work don’t extend very far into the future. If we don’t keep working, the paychecks will stop, and all the trade that those paychecks facilitate will stop as well, resulting in millions of bankrupt companies and government agencies, tens of millions of unemployed, and mass misery and death.
- Fortunately, man has devised two ingenious ways to extend the half-life of work: savings and credit. If you save several months of expenses, you can stop working for several months and still have money to buy essential goods and services. Also, if you have several credit cards with unused balances, you can forego work and buy essential goods and services on credit for as long as your credit limit lasts.
Now, assuming for the moment that coronadiles (i.e., the coronavirus) are every bit as dangerous to us as crocodiles are to zebras, have we built up enough savings and credit to forego all the work that is necessary to drastically minimize the danger of coronadiles?
I have my doubts.
It would be one thing if pre-pandemic the national debt was a quarter of the GDP, every state pension fund was fully funded, 75 percent of adults had a year or more of expenses saved in their emergency funds, most adults had plenty of unused credit, our industrial base was robust, the typical adult owned his or her home outright, and our safety net was little used. If our pre-pandemic fiscal health were that strong, I’d say, “Hell, yeah. Shutter the non-essential portion of the economy for a year and backstop that coerced unemployment by putting five trillion dollars on the national credit card. We got this.”
But our pre-pandemic fiscal health was far from rosy. Here are some of the grim details:
- In February of 2020, the national debt was roughly 107 percent of GDP.
- Only two states (Wisconsin and South Dakota) had fully-funded pension systems. The worst state, Kentucky, had only funded 33.9 percent of its pension system.
- Twenty-eight percent of adults had no savings. Twenty-five percent of adults had fewer than three months of expenses saved. Only 18 percent of adults had six or more months of expenses saved.
- The average adult had an unused credit card balance of roughly $25,000. But averages aren’t always a good measure of something because averages are warped by extremes. And that’s the story here. The average adult may have had $25,000 of unused credit, but many adults had far less than that. Sixty-seven percent of adults aged 18 to 29, for instance, didn’t own a single credit card and thus had no readily available credit to smooth over a financial crisis.
- Many of the key tools in the fight against a virus that attacks the respiratory system weren’t made here. Things such as ventilators, respirators, test kits, masks, face shields, gloves, gowns, and hand sanitizer were largely made in China.
- Thirty-six percent of household heads rented their homes, 40 percent of household heads had a mortgage, and only 24 percent of household heads owned their homes free and clear. That’s a lot of people who had to come up with a mortgage or rent payment every month.
- Forty million Americans were on food stamps pre-pandemic. Seventy-four million Americans were on Medicaid. Sixty-five million Americans were receiving Social Security benefits, and for roughly 25 percent of the elderly recipients, Social Security was essentially their only source of income. That’s a lot of people who were dependent on a lot of workers paying a lot of taxes to the government.
Frankly, I don’t think we were fiscally strong enough for a two-week lockdown, nevermind the ham-fisted five-month lockdown we’ve endured to date. Two generations of fiscal profligacy, in both the public and private sector, has reduced us to the helplessness of zebras. Yes, the federal printing press has masked this helplessness for the time being. But how much longer can we hide behind funny money and not address reality? How long before most of the shuttered business are never able to reopen? How long before federal borrowing begins to produce double-digit inflation or worse?
The national debt is rapidly approaching $27 trillion. That’s 136 percent of our GDP. We can’t continue this way. Deaths by coronadiles will pale in comparison to deaths by a collapsed economy. The chickens of two generations of fiscal profligacy have come home to roost. It’s time to open the economy, take reasonable precautions (i.e., wear a mask in public), and brave the lurking danger of coronadiles until a vaccine makes that lurking danger moot.
Final Thoughts
Okay, groovy freedomist, that’s all I got. What say you? I say we are too fiscally weak to continue worrying about coronadiles. We got to open up the economy and take our chances. Continuing the lockdown and purposefully bringing about another great depression or Weimar Republic levels of inflation will produce far more death than the coronadiles ever will. But, then again, maybe I’m nuts. Maybe coronadiles are a bigger threat than I suppose. Let me know what you think when you get a chance. Peace.
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