Pandemic Economic Relief and Magical Thinking: Holes Don’t Fill Themselves

by Bob Schwartz

Based on the reluctance to craft substantial economic relief during these worst days of the pandemic, it seems that magical thinking has again taken over among fantasy Senators.

Magical thinking had a lot do with how the U.S. got into this tragic and avoidable situation. Our national leader months ago used the exact words “like magic it will disappear” to avoid actually doing anything about it.

The economic relief magic is supposed to work like this: If we wait a little while longer, the free market, as always, will rescue us on its own. Why spend hundreds of billions today when the bad times are about to disappear? Like magic.

Economic recovery and growth can be confusing. It does seem a bit like magic when consumers have money, give it to producers, who pay consumers as workers, who then spend the money, spiraling up and up. Additional money gets injected into the system to juice it up and keep the momentum going, but mostly it appears to be self-sustaining.

Except when a giant hole has been dug, and many people are near or at the bottom. The hole won’t fill itself. Those, especially those in the Senate, who think that the hole is manageable without filling it in are not paying attention or are deluded. Experts have said, even factoring in a vaccine in 2021, that recovery is going to take place over a matter of years. Maybe they are too pessimistic—economics is after all called “the dismal science”—but economic recovery is not “just around the corner.” In the meantime, those in the government who hold the purse strings should plan on releasing billions and billions to fill the hole. And while they are at, figure out how to keep the pandemic from getting worse, which it is, and thereby digging the hole deeper. Because magic is not going to work.