Nov 29 2020
We could complain about a year that is coming to a close, and for many reasons.
However, history tells us that our forebears had it a lot worse. For example, somebody born in 1890 would have endured a long depression (1892 -1908, with intermittent growth years), World War I (1914-18), five recessions, the 1930s Depression, another recession, World War II (1939-45) and a further post-war depression for two years. Those poor souls were in their late 50s before they saw economic clear-air, and the ability for many to own a home and to live without fear and dread.
Indeed, over the 232 years since British settlement, our nation has had five depressions, 27 recessions, two great wars and a 20th century during which our military went to the aid of other nations every decade, except one (the 1980s).
The current generations have had only one recession since 1991-92. It happened this year, and was a doozie at that. And yet, compared to the other nations among the world’s 20 largest economies, we have still suffered less than most.
A snapshot of COVID-19 deaths across the world’s 230 nations, principalities and protectorates reveals a lot of pain, particularly in highly developed economies.
That said, the estimated 1.5 million COVID-19 deaths this year will account for just half the normal number of deaths due to respiratory illnesses, and less than 3.0% of all deaths, recorded each year.
However, panicky epidemiologists, health officials, politicians and 24/7 media coverage ensured we were worried. In Australia, we’ve recorded less than 1000 deaths (or 0.6% of all deaths) due to COVID-19 by the end of November 2020. We were similarly spared the worst of the Spanish Flu in 1918-19, with just 12,000 deaths (out of some 50 million+ deaths around the world). It helps to be an island-nation continent in the Southern Hemisphere, with a warm climate.
And our economy? Again, we’ve been fortunate. Among the 20 biggest economies, the chart below shows a sea of red in terms of GDP negatives in the 2020 calendar year. Only one country, China, shows positive growth.
Of course, negative growth of more than 4.0% marks the worst year in over seven decades. We are also on our way to a high national debt, and a scary total debt (including household and corporate debt) as a share of GDP. However, due to the lowest nominal interest rates in history, servicing this debt should be manageable in the immediate future.
Furthermore, as much as we complain about our politicians, and the vacuum of reformist zeal and courage, we could spare a thought for our British and American cousins who have had a dreadful year on the political front.
And finally, the job scene.
Again, everything is relative. As of last month, we were in the middle of the unemployment pack. It would have been nicer to have been in the rarified full-employment zone that six of the world’s largest economies occupied, but at least we were average. In addition, JobKeeper subsidies numbed what could have been a lot more pain and suffering.
Perhaps we’ll just continue to be the lucky country. But most of us will be glad to see the back of 2020, and to welcome in a more prosperous 2021.