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Even as we are just beginning to confront the magnitude of the shock caused by the covid-19 pandemic, we need to wrap our minds around a painful truth. We are in the early stages of what is going to become a series of cascading crises, reverberating throughout the world. And we will not be able to get back to anything resembling normal life unless the major powers can find some way to cooperate and manage these problems together.
The first phase has been the health-care crisis in the world’s major economies. The next phase is the economic paralysis, the magnitude of which we are only just beginning to comprehend. In just the past two weeks, the United States lost some 10 million jobs, exceeding the 8.8 million total jobs lost over 106 weeks during the 2008-2010 recession. But this is only the beginning.
Next up will surely be the danger of countries defaulting. Italy entered the crisis with the highest level of public debt of the euro-zone countries, and the third-highest in the world. The country’s debt will skyrocket as it spends money to combat the economic fallout from covid-19.