Why is the economy in a coma?

The metaphor of the economy being in a "coma" was discussed in a conversation between Tim Ferriss and Howard Marks on the Tim Ferriss Show. Howard Marks explained that the economy was put into a coma as a strategic measure to fight the severe impact of the COVID-19 pandemic. This involved closing businesses, freezing economic activities, and encouraging people to stay home, which consequently halted various sectors such as stores, movies, hotels, airlines, and sports. Essentially, this severe shutdown was akin to putting the patient (the economy) into a coma to treat the disease (the virus) 1.

The Fed and the Treasury have been injecting funds to keep the economy on life support during this period. This support is expected to continue until there is enough confidence that the economy can sustain itself without these interventions. Key metrics such as unemployment rates serve as indicators to assess when it might be safe to start withdrawing these supports. Until then, the life support (financial injections) will persist 1.

This approach reflects a cautious strategy to prevent sudden collapses in the economic structure while the underlying issues related to the pandemic are being managed.