David McWilliams: How Covid-19 could change Lahinch and Ranelagh for the better
In a pandemic, unlike a recession, spending is constrained not by income but by fear
A glorious day on the beach in Lahinch. Photograph: Ross Kinnaird/Getty
The July stimulus plan announced by the Government this week is a step in the right direction. Expect more because the economic heft needed to lift the economy out of this slump will be hindered by coronavirus.
In normal recessions, the recovery emerges slowly as people become more confident, looking forward instead of backwards. An iterative process, this recovery is a step-by-step movement, like climbing a ladder, looking for the next rung. Confidence builds, one small decision at a time. We edge upwards. True escape velocity is only achieved when consumer spending – 60 per cent of GDP – kicks in. Without consumer spending, there is no recovery.