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An apology to the young

The coronavirus pandemic is about to give way to the biggest debt and unemployment crisis ever.
The world is basically adding $2 400 debt to every man, woman and child because of the way it responded to the pandemic. Image: Getty Images

The world is in an economic crisis due to a virus – and, more likely, because half the world was locked down for between three weeks and more than two months.

Our politicians loved their new role. They came out in front of the cameras and paraded their science. In general, they were all over the place and, having lockdown-related businesses, they thought they would save them by spending our grandchildren’s future.

Read: Dlamini-Zuma told to amend invalid lockdown regulations

The rich world issued $17 trillion in debt in a matter of months. This on a total GDP of $63 trillion for these countries. The developing world has no total figures, but estimates are that the debt will explode by at least $3 trillion this year on a GDP (in nominal dollar terms at current exchange rates) of about $26 trillion.

So the rich are adding 27% to the debt-to-GDP ratio within two quarters, and the developing countries around 12%. This is debt issued in under one year in most cases.

Governments in many cases will not be able to stop. The politicians have been able to raid the future.

The world is basically adding $2 400 debt to every man, woman and child when the actual average GDP per capita is about $11 400 per person. This, with $8 000 in government debt to pay off already.

Read: The increasing absurdity of Patel’s red pen

Moreover, the income this year is likely to decline to around $11 000 as world GDP will decline.

This is not consumer credit or business debt but government debt alone!

Add all the debt together and we owe about three times the value of world GDP per capita!

Relief, for whom?

Now, I believe that in times of crisis government needs to get money to business and people – but again, most money is going from central banks to government to the market for speculation.

Markets now act as if the world has recovered or is going to recover very quickly, but the debt burden is just too large.

And the fear social media and governments themselves have created around a million deaths is absurd.

Yes it is, since we have now learned that we will not lose that many fewer lives due to these interventions. We will only flatten the curve, which means the deaths will happen but over months rather than weeks.

One or two million may sound like a lot, but the Spanish flu a hundred years ago killed 3% of the world population. That is 235 million people today. So world deaths are going to be less than 1% of that.

Moreover, the likes of the Spanish Flu and the Hong Kong pandemic killed both young and old.

Covid-19 is mean, but it has not killed many young people and not too many working-age people.

The typical person who has died as a result of this coronavirus was over 80 in Europe and about 20 years younger in the developing world.

It has killed fewer working age folk than the normal flu. Yes, it has a lower mortality rate than the typical flu. Even in South Africa the flu kills about 20 000 people every year, mostly older – but more evenly spread among age groups than Covid-19.

The typical age at death in South Africa according to Statistics SA’s survey of causes of death is 57 years. The typical Covid-19 death is at age 62. The typical age of a flu death in 2015 was about eight years younger. So the working age population is generally not bearing the brunt of this disease.

Cruel irony

Yet it is this working age group that is going to see more than 200 million people become unemployed in the world.

South Africa has already seen more than three million unemployment claims as a result of Covid-19-related job losses. The Unemployment Insurance Fund (UIF) is making some data available on this, and that is great.

Many jobs will come back, but the best-case scenario for SA is that unemployment will rise by at least a million people by the fourth quarter of 2020. Worst case could be as high as seven million more unemployed.

Even at one million more people unemployed, feeding a household of 3.5 people means that 3.5 million people, at the very least, will suffer.

Some estimates put Covid-19 deaths in SA at 10 000. The World Health Organisation (WHO) now estimates 23 000. Government thinks 45 000.

As more than half of these people are over 60 they may not have dependants in the true sense; however, they may be taking care of their grandkids.

But I digress. The fact is that many times more people will suffer unemployment rather than death as a result of Covid-19.

On current forecasts from both sides, anywhere between 25 and 700 times more people will suffer unemployment for at least a year.

Madness

Add the previously unemployed (remember them?) – over 10.4 million people who are now even less likely to get a job – and the case for the lockdown seems like madness.

Real leaders may have started a lockdown, but would have concentrated on getting the health system ready and gathered facts. In fact, they would have listened to the scientists and noted that they said months ago the need for the lockdown is over.

But politicians have overplayed their hand.Not just in SA, but all over the world.

Read: Court cases are piling up against government lockdown

They did not want to listen, or felt trapped and that they had to keep up the act and pretence of ‘knowing’.

They showed their egomaniacal side and destroyed much of the world economy instead of focusing on the need to get economies going and children back to school while protecting the old.

They did not listen to other scientific voices or economists or doctors or business, just one type of model from one viewpoint.

One view, and governments looked to it

Much can be traced back to one model from the UK’s Imperial College.

The WHO acted like it knew what to do after slipping up a few times at first.

The problem in combining instant knowledge with very big ‘helping’ decisions is that it makes for gigantic mistakes. The world economy will decline by 6% before this impact is over. Most of the decline, from a forecast of 3.2%growth, is due to the lockdowns.

The few economies that will still grow

Look at South Korea, Taiwan and Japan, and how their GDP growth is changing from trend. Yes, it is worse than before, but they will still eke out positive growth despite the rest of the world going into collapse.

They will not see the unemployment rates of the lockdown countries, or even big increases in unemployment. They will not make quite the same amount of debt (although Japan is creating a lot of it).

Once again, a generation will learn that printed money does not create lasting growth. It just pushed the problem out a little.

The coronavirus crisis is about to give way to the biggest debt crisis and unemployment crisis ever. Bigger than the 1920 Spanish flu and bigger than the global financial crisis of 2008.

We have let our children and grandchildren down.

Sorry, young adults – we let you down.

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Not ‘We’. Governments let us all down. I let nobody down, I was let down.

I have done all I can for my kids and the kids of the guys that work for me. I owe no one an apology, this ANC government owes SA an apology and then acknowledgement and a side step.

Imagine how SA would have been able to weather the storm had the ANC not spirited away 1/3 of our GDP during the Zuma years.

Have often dreamed about that, lower tax, lower fuel price, cheap power, free education, no potholes, no litter, sky high GDP, jobs, growth, no lying greedy politicians …………………………and then it is time to pinch myself.

The Imperial Collage study recommended that we wait for hospitals to come under strain before we shut down the economy.

South Africa didn’t follow that model. Instead we tried the South Korean model of stamping out the virus. But we should have known it won’t work because we fared so poorly against TB (and HIV).

Again wrong,

Many provinces still have very few cases.

The mistake was that flights inwards were stopped way too late.

The cost was thought too high then, not thinking clearly about the cost of failing to do it which we are seeing now.

casi_negro ….you say

“Many provinces still have very few cases.

The mistake was that flights inwards were stopped way too late”

Incorrect on both…as no one in medical RSA categorically knows if rural deaths are covid as the effort and distances is to great and the costly examination on the deceased high

Inbound flights? If inbound flights were indeed the “spread” to the infections in RSA, the results should be greatly higher than what they are, whether aviation is contained or not.

With crammed townships, taxis and daily grocery trips, you don’t need extended inbound flights to trigger an explosion

Its the interprovincial funerals that spread the virus,

Leah, no,

There is no way to avoid reporting deaths, irrespective of reason.Deaths are logged per ID, and excess deaths in SA shows no significant increase.

Only the WC now started to surpass historical weekly death averages.

Nope, for a combination of reasons Gauteng, NC, FS MP, LP and NW are actually managing.

Look at Argentina, they had a lockdown a few days before SA with fewer cases. They have Huge metropolis with millions living together. Somehow they contained it better than WC.

Yet wait lets see how the “open SA economy now”performs..

At least the cards are on the table now. Government can’t take care of people and economy, their job is…hmmmm don’t really know. We can’t wait for these bubble heads, start creating, collaborating and be confident in the face of this mess. We need to take care of each other

We would have been so much better off if Government did what they normally do, that is nothing! Please just go back to doing nothing!

One old man to another “Old Man – River” assuming your point was followed and our numbers followed the USA, exactly how would that have been better?
I am really hoping to hear this answer………………………..

Why are we surprised ! The people making the decision to lockdown are immune from the economy. No
wages of Government Employees have been lost . Only the Private sector has paid the price . Life for Government Employees has got so good you going battle to get them back to work anytime soon ……..

Main reason for teachers’ complaints about schools reopening. What incentive do they have to go back to work? It’s winter, their salaries are paid, educating children has never been a priority for many.

And now they are begging from the private sector to once again rebuild.

I could not agree more. Teachers are a prime example. They want schools fumigated despite them having being closed for so long there’s no chance of any virus having survived in them. It is simply a delaying tactic to stop having to go back to work.

Let us not forget that the disgusting culinary habits of bat eaters should also be blamed. I see very few signs of these particular culprits being held to account.

Eating bats has nothing to do with it. Dont be misled by this diversion. This is a direct result of failed security in a biolab facility.

The ANC owe the youth an apology. We were heading to unsustainable unemployment before Covid-19 just on corruption and mismanagement alone.

One thing we can learn from the global reaction to the virus is that humans are fallible. People make mistakes. Nobody has all the relevant information and knowledge. We can do a tremendous amount of harm, even while we want to do good. The road to hell is paved with good intentions…..and ignorance. This is why no system should allow a small group to make decisions that could impact on the entire group. The decision-making process should be individualised and distributed among everybody, for everyone to make his own errors and to be held accountable for them.

A stable and robust system allows for many small errors, regularly, by a wide variety of participants. Such a system is robust, simply because individuals learn from their own errors, as well as from the errors made by others. Such a system self-corrects in real-time. The most beneficial ideas survive and remain in action, while the mistakes fall away and disappear from the system. The system improves itself and provides an increase in the sophistication of solutions, simply because many participants make many small errors regularly. Free-market capitalism serves as an example of such a robust and anti-fragile system.

On the other hand, we find the self-destructing system, that does not allow for my small errors but allows for one gigantic error only. The system concentrates and aggregates the error-making process, to create one cataclysmic error, that takes down the entire system. This system puts all decision-making powers in the hands of a Central Planning Command Centre. The error-making process is nationalised and centralised in the hands of a small group of individuals. This kind of system is fragile, weak and unstable. This system creates a negative feedback loop where errors lead to more errors and the process compounds the mistakes made by fallible men. This kind of system incentivises and rewards errors that blow up the entire system. The power given the WHO, the Imperial College in London, Central Planning governments with their Central Command Centres are examples of such a highly unstable and destructive system.

We need to make the system anti-fragile and robust again. We have to move away from Central Planning towards libertarianism and individualism and free-market capitalism. This is the basis of the self-correcting process that improves the human condition.

I can just see the national executive committee nodding their heads in full understanding.

Great analysis…can see you have taken many of Taleb’s teachings to heart!!

Mike thank you for the article, I was wondering where to from here. The ruling party agenda is very clear and there is no interest in fixing the economy (check out the Hoover Institute youtube video about ” Why does Stalin matter”) they and many other intelligent people are not convinced by the actual historical truths that happened less than 100 years ago and still happen in socialist countries. So as the IRR said about 5 years ago at a talk at Randpark, the red party does control the state. Your views will be appreciated, where to from here.

It is a typical ” Health & Safety” response to the natural world.

By natural you mean a unknown virus? and that perhaps some idiot made in a lab?

What’s funny is that after everything that everyone has been through no one seems to have learned anything.
When the threat of species extinction appears real the masses are perfectly complicit to bunker down. As soon as they realize the threat isn’t so serious they will realize the halt of the economy will affect their stomachs more than the virus and start to protest. Slowly the economy returns to normal with the end game being perpetual economic growth.
And now the pandemic is mostly over we read tales of indebtedness and apologies to the young over a short blip in time.
If there is an apology that needs to be made to the young it has nothing to do with handling of a pandemic. The apology needs to be for the intrinsic greedy nature of the species which is far more powerful than any miserable little virus that ever tried to threaten it.
If you want to avoid apologizing to the young don’t make them part of it by not having them. You only have yourself to blame.

I absolutely agree with this.. the herd of elephants in room that no-one ever mentions…. the inability of the human race to accept death as part of life. It is greedy, selfish, destructive. Shame on the human race !There is no economy on this planet that has a successful plan for dealing sustainably with an overpopulation and lack of good education.

Overpopulation is nothing else, but proof that the economic system is successful. It is physically impossible to have an overpopulation of any species without the simultaneous abundance of resources to support that overpopulation. The earth did not experience prolonged episodes of overpopulation under the feudal and collectivists systems. The Malthusian Trap prevents overpopulation under these systems because famine kicks in to shrink the size of the population to bring equilibrium between the population size and the availability of resources.

The move towards property rights, away from collectivism, enabled society to escape from the Malthusian Trap. When the capitalist system and property rights delivered food security, humankind was enabled to prosper and to escape from famine.

As society moves back towards communalism with the implementation of socialist and communist policies, the size of the population has to shrink to reflect the self-created scarcity of resources. The move away from property rights is a move towards famine and disease. Socialism sets the Malthusian Trap once again.

Shame on the socialist, the communalists, the naive and ignorant leftists, for they are mass-murderers. As South Africa, under ANC rule, moves away from capitalism towards communism, our population size will have to shrink by about 50% to compensate for the lack of property rights. Venezuela and Zimbabwe are live displays of the Malthusian Trap in action.

Disagreed. An overpopulation of cockroaches sustained by the economics of poor sanitation and faecal abundance will eventually all perish. Beautiful laws of nature at work.
Likewise the current over population of the human race is thanks to abundant exploitation of fossil fuel and leverage of financial markets. Our way on earth is unsustainable regardless of how successful we seem in this current snapshot of time. Our successful way of life is so embedded in economic growth that there is no way out of it without mass extinction. When mass extinction does not seem a real threat we always choose economic growth and then seek to apologise for ever deterring it. Thus the perpetual death spiral continues. We will be part of the future fossils on earth. It’s only your innate humanness trying to convince you otherwise.
Zero sum.

Angelo, everybody is concerned about “overpopulation” and how people “exploit nature”, but nobody is willing to do his part to solve the problem. Everyone wants the other guy to remove himself from the face of the earth, but no person feels strongly enough about his views to save humanity from himself, to remove himself from the face of the earth.

The hormone testosterone was developed by the wonderful process of evolution to ensure the viability of the human race. I won’t bet against nature, for I have been on this earth for 57 years, while nature has been around for 4.5 billion years. You can stop worrying, testosterone guarantees the survival of the human race.

Spot on Mike. We need more voices like yours.

The lockdown of entire countries never made sense. China can lock down a city, but how did we imagine you could lock down an entire country?

Well you can’t and we are paying the awful price of the lockdowns – and the virus still out there.

Unbelievably, ours and the global press out there are yet to interrogate the logic of the lockdowns.

And so the madness goes on. What on earth are they going to do when the second wave comes in?

Hard lockdowns again? Seriously?

No-one comes out of this life alive, so make the best of your time on earth through both thick and thin. Take responsibility for your own life and stop blaming others. Don’t seek praise nor pity, just try your best to leave this world a little better than how you found it.

Thinking with your balls ain’t gonna save you Sensei.

Government ignorance!!!
Actually Politicians are overrated nowadays, they are destroying our economy while acting like they actually care for citizens….

“Politicians and corporations have always placed economic interests above moral interests. This is now hurting the entire planet.”

Have I been banned? censored?

The marxist anc started the process 26 years ago, if not 108 years in the past, covid has merely exposed their lies, fraud, thievery and incompetence for all to see!

Wow, so here is the other argument where like the ANC, we choose to blame COVID and the shut down for the current state of the economy and the unemployment rate and the fact that our kids have been hurt by this.
It is almost as if the Zuma era never happened and the repeated downgrades and junk status and the continuous negative and declining economic growth and 25 odd years of corruption and the ongoing SOE pillaging never happened.
South Africa would have got to the point where we are now somewhere in the next two years and all the corona virus was press the “Fast Forward” button.
I may not like this but I am comfortable admitting it, now at least I can concentrate on getting myself and my family including kids out this mess.
Wake up South Africa, the government are not going to apologize so stop waiting for one and if you are waiting for one then you are wasting valuable time. It is time to hustle.

Nice article Mike – I agree one 100%. Craziest over-reaction I have ever witnessed and probably ever will.

It’s like we are trying to self destruct.

Governments never let a good crisis go to waste and all have latched onto this to push through agendas and policies that they never could. Lets see see what ANC will be pushing through in the next few weeks – raiding the PIC coffers no doubt and later our pension funds….

Policians serve one thing – themselves. Never will they admit they made a mistake, and will only act in a manner that preserves their power and ability to fleece our countries wealth.

The unrest that is besetting the world is coming our way. The youth you are talking about Mike will start showing their anger soon.

”Just buy One Way tickets and go – this is no place for young people anymore”

The ANC led Government is and has always been an ‘’underground guerrilla’’ movement – that did not change the way they operate when they came to power – voted in by a plethora of ‘’non-taxpaying’’ people (they didn’t qualify as tax payers), with millions on ‘’social grants’’.
Their Chinese comrades, with their (methinks!) ‘’genetically modified’’ Chinese virus, has been funding and supporting them all along. The Socialist world per se seems to have benefitted from Covind 16 – it was a perfect storm for them to push their ideologies and capture what they wanted – trade platforms, Hong Kong and possibly Taiwan, etc.

CR demonstrated his ‘’ master class acts’’ in Parliament when he allowed Malema to take center stage with his expropriation without compensation in his motion in 2018.
CRs next big opportunity came with Covind 19 when he let loose Mrs. Zuma – Judge Norman Davis didn’t mix his words and called it what it is – a power-drunk politician who believes she knows best for South Africans.
Many of her regulations were exposed as contradictory and senseless.
Her utter disregard for the rights of the minority whites, as her dim-witted actions, with many regulations exposed as contradictory and senseless.

It cost me and ”arm and a leg” to get my three kids qualified as professional individuals – collectively 23 years ay University – I have paid my dues!

The ANC have never cared about anything else than enrichment of the chosen.
With this virus pandemic it became clear again, spending R440 million on Cuban health professionals (where are these people – maybe on a game drive),not caring about the tax lost on cigarette sales.
SAA lost R4400milion during the so-called business rescue operation and then at the last R30 million the minister wake-up and say that’s rater a lot – what about the rest that were spent.
Keeping with the SAA that in essence belongs to the government they now propose to but it from themselves for a cool R21000 million and calling it a newco – Gone are the old – appointment another delinquent director and start from scratch. Good economics all around ANC.

I disagree with Sensei post

Thank you. I love an intellectual debate.

An average person, of fairly average intelligence, like myself, is able to motivate and explain his opinion. You gave us your opinion, without motivating it. We are left to our own interpretation now. Therefore, you are obviously a collectivist who supports central planning, who abdicated his responsibilities to other clueless individuals, so he can play the victim when things do not materialize in the way he anticipated, and then turns to the burning of libraries and schools in protest.

If you disagree with me you are in good company. My wife also disagrees with me on a regular basis, but she motivates and explains her opinion quite clearly and convincingly! She is always right, so there is hope for you too.

You are wrong about escaping the Malthusian trap. It is impossible to escape and the best anyone can do is kick its can down the road. It is the basic property of all species to try and maximise their growth rates. It is a basic property of the system in which organims exist to have a varying supply of resources. Sometimes the system will supply resources to drive growth and sooner or later that growth will overshoot resource supply and Malthus will raise his hand and chop off heads till the few left can duck or hide and start the growth again. Such has been life on Earth since the beginning and such will be life on Earth till the end, which is far more likely to be an extraterrestrial strike on earth than by human hand.

A lot of one sided hind sight is always right talk in this article instead of real journalism. The government, at least in South Africa, has always stated that they are in unfamiliar territory and will do what in their opinion is best to save South African lives. Saying they stuck to the pretense of knowing says a lot about the writer’s bias just as one of the points.

In hindsight it is easy to be critical but 4 weeks ago the exponential growth of the death toll across the globe wasn’t something you could ignore.

It is also amazing that you make the comparison to a hundred year old Spanish flu without making a comparison about the world’s response to Spanish Flu vs Covid 19 and how that may have impacted the death toll.

Please stop saying that COVID-19 is not as bad as the normal flu. Instead of looking at South Africa, who have done a good job of postponing COVID deaths, look at the USA, who initially treated it like the flu. According to the CDC, the flu plus pneumonia (they don’t differentiate between the two) have been the cause of death of between 15 and 60 000 people per year. In 5 months COVID has already killed 110 000.

Factually incorrect, emotionally correct, maybe. From the well-proven fact that people with the metabolic syndrome has a tenfold increased risk to die from covid, combined with the fact that the metabolic syndrome is a lifestyle disease, the person of average intelligence will conclude that people who died from covid actually killed themselves.

In the face of all these facts, if you come to an alternative conclusion, it does not say anything about the facts, but it rather says everything about your perceptive abilities.

No, we didn’t let anyone down other than ourselves believing the anc clowns were ever capable of ruling a country. We owe nobody an apology, other than ourselves. Young people must take the initiative now to change things and stop believing what their social media echo chambers tell them. Stop trading in the currency of ‘likes’ and grow a pair. Stand up for what you believe.

End of comments.

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