The New Global Economy, Huge Declines and Possible Solutions, What is coming!

The New Coming Global Economy

Special Report, Boothe Global Perspectives

By:  Ben B. Boothe, Sr.


We at BootheGlobalPerspectives did a research study of 22 of the worst pandemics in history, published in BootheGlobalPerspectives (in the search box hit Pandemic history and you will find the article). 

History tells us many things:

1. Political leaders always deny or downplay plagues and epidemics when they first hit.

2. Plagues or pandemics often bring about an overthrow or change of leadership in nations.

3. Plagues often are accompanied by recession, depression and economy decline.

4. Plagues throughout history often are accompanied by war and conflict.

5. Plagues often change the political power and structure of nations.

6. Plagues tend to impact international travel and commerce negatively, and bring nations into more isolation.


In the most recent Foreign Affairs, an article by Carmen Reinhart and Vincent Reinhart title an article as “The Pandemic Depression, The Global Economy Will Never Be the Same”.  As the image portrays, is our

world falling apart?  

Reinhart and Reinhart point out that the current Covid-19 pandemic will have an important impact upon the world population. They suggest that the recovery will not be as “robust or rapid as the downturn”, leaving an “extended stretch of time” before the global economy recovers to its 2020 level.


The World Bank has estimated that as many as 60,000,000 (sixty million) people will be pushed into extreme poverty.

The article points out that the U.S Bureau of Labor Statistics posts the worst unemployment figures in 72 years in the USA. The Bank of England warns that it faces “its steepest decline in output since 1706”.

Is this a ‘Depression’ or a ‘Recession’?  By all measures it appears to be much more of a Depression, even though Americans hate to use that term because it brings images of poverty and despair from the “Great Depression” days which were so painful to Americans.

  The question is moot. It already has!


History of economic downturns:

+ In the history of Pandemics it took some nations or city/states 20+ years to recover

+ In U.S. history since the mid-nineteenth century it took an average of 8 years for GDP to return to pre-crisis level.

+ Trade wars initiated by the USA before Covid-19 already harmed international commerce, and especially trade with China.

+ U.S. policies initiated by President Trump were hurting international travel and since Covid-19 international travel and tourism has collapsed.  This has a devastating impact on places such as the Caribbean, and other nations where tourism generates over half of income and employment.

+ Commodity prices such as oil and gas have dropped substantially impacting the oil and gas industry for the USA and other nations world wide. Some nations, are already near default as of April 2020 because of the collapse in oil and natural gas prices.

+ The World Trade Organization estimates that global trade may fall between 13 and 32% in 2020, making it the worst economic year for nations around the world since the 1930’s.

+ High failure and closing numbers of small business, many of these will never re-open, because their owners will have depleted their savings trying to survive.  This will tend to reduce the number of investor entrepreneurs.

+ Many of the millions of fired or laid off workers will be gone from the labor force permanently.

+ Governments are experiencing more demand for funding from dozens of important sectors, while government (Local, State and Federal) income from tax revenues decline.  Is it possible that some governments will have to file bankruptcy?

+ In Developing nations and poor nations, such as we see in Africa, South America, and even big nations such as India, the world, according to the United Nations, is facing the worst food crisis in 50 years.  This points to eventually social unrest and instability.

+ Divergent groups such as black or racial protesters, Neo Nazi groups, Cowboys without a Cow (self appointed militias), or uneducated sectors of the population strongly impacted by blind  politicization, tend to disrupt social peace and unity. (Note many of these groups would dissolve if we had better economic leadership, more jobs, and political voices of moderation and unity).  


The Foreign Affairs article states:

The long list of banks that have enacted such measures includes the usual suspects in the developed world—such as the Bank of Japan, the European Central Bank, and the Federal Reserve—as well as central banks in such emerging economies as Colombia, Chile, Hungary, India, Laos, Mexico, Poland, and Thailand. Essentially, these countries are attempting to build a bridge over the current liquidity to the recovered economy of the future.”   We must look at reality, note the chart of economic decline: 

This begs another question.

Considering all of the additional debt and funding already allocated and spent to help during this economic panic, will the massive funds for social stability create  another harmful result, that of the pressure of how to fund repayment of the massive government debts?

Trump policies to build physical, legal and financial walls, will further damage global economic activity.   As future income from international trade declines, the USA may face future declines in tax and other economic income. So, how to service or pay the debt, without initiating high inflationary policies, and the “printing of more currency”.  Thus higher interest rates are likely to follow, this may also tend to harm future recovery and development.

We must remember that periods of poverty or economic crisis can provide fuel of political instability, social instability, nationalistic mistrust and a decline of multilateral-ism. That also happened in history (see WWI and WW2).  Nationalism created huge cruelty, conflict and millions of lives were lost.  (Remember NAZI Germany).   

It took Europe over 25 years to recover after WW2. 

The United States and the extended world need, a united, stable government, with wise and stable governing, to chart a way through the next few years.  The recovery and stability of the United States, is critical, to provide leadership, and an example for the world, that “we can recover and prevail”.

This implies changes of policy, changes of direction, and changes of style.  We can hope that the American people will have the wisdom and courage to bring in capable, stable, calm and thoughtful leadership, which will assemble the best minds of the world together, to create a sound path of long term recovery and stability.  This new leadership will stress "unification" of America's divided culture, to heal the divisive wounds of the past 40 month.  We have experienced a period where "Conflict" and "Divisiveness" have been used as a distractive tool, harming the "United" states.  

Innovative, fearless, business leaders can find opportunities for positive business growth. We have already identified some ways that a proper response to COVID 19,  can identify and target properties and methods to benefit from good investment, treatment, and prompt new appraisals of property, for good appreciation and investment potential.  Remember that some of the great wealth of history in the USA was made during times of crisis.  Our firm, BBAR Inc. (Finding good values during deep recession) has progressive ideas for those who would rather seek opportunities than just hunker down and do nothing.  Give them call 800-379-8048 or an email:  We have solutions if you have desire to move forward.  Often, if people can realize there are opportunities to prosper again, cultural and social unity can grow.   Give us a call and let us show you how to increase values, even in this unique market.  In the meantime, seek more positive solutions, more unity, and more ways to celebrate our nation, even during challenging times.  This is not a time to "Burn" but a time to "Earn", and there are ways this can happen, to those seeking progress. 


Credits and sources:

Much of this article is from sources in BootheGlobalPerspectives, as well as current reports in the financial news on the current economy.  Ben Boothe has been a banker, economic consultant and has worked in the USA and several nations in economic development for the USIS, USIA, and The World Bank.  Our thanks and credit go to sources of the World Bank, International Financial System at Harvard Kennedy School, Carmen Reinhart, and Vincent Reinhart (Chief Economist and Macro Strategist at Mellon).  We recommend that interested readers read their upcoming article in FOREIGN AFFAIRS as well as numerous reports and studies available on the internet.