"With a sudden stop in economic activity, global output will contract in 2020."
That's the word from the managing director of the International Monetary Fund, Kristalina Georgieva. The IMF was created in 1945 and now has 189 member countries. The IMF's goal is to improve economic conditions and reduce poverty throughout the world by stabilizing the international monetary system.
But if everything stops, the result will be devastating to every part of society. That is happening as the corona virus attacks every segment of every society around the world. Rank is no exception. From the homeless in crowded cities to members of Congress to United Kingdom Prime Minister Boris Johnson and Prince Charles, heir to the British throne, people have tested positive for the virus.
In just eight weeks, the death toll in America from corona virus infections has gone over a thousand.
Meanwhile, cities and states in the U.S. have ordered people to stay home, except for essential needs or if they are essential workers. The same is true for entire nations in several parts of the world.
Result: The economy stops. Already, ten times as many Americans filed for unemployment benefits in a single week compared to the week before as businesses ranging from retail stores to theaters to entertainment arenas to corporations close up shop.
It's not hard to figure. If people stop going to work and stay home, they stop spending money (except for essentials). And if they stop spending money, the economy grinds to a halt.
Only this time, it didn't slowly grind to a halt. It was sudden stop.
Crash.
So the IMF announced that it is ready to use its $1 trillion financial capacity to support its member countries. But will that be enough? In America alone, Congress approved a $2 trillion rescue package for its citizens and companies.
If the worldwide shutdown lasts more than a couple of months, the crisis will make the Great Depression of the 1930s seem like a walk in the park as the economy takes an afternoon off.
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