In this scenario the virus is severe and our response to the virus is insufficient. So we can’t control the virus and we end up facing some of the worst-case predictions.

Deaths in this scenario reach into the millions, 2.2 million (taken from Dr. Neil M Ferguson) from the disease alone.

But the actual impact is much worse. Demand for healthcare overwhelms supply creating a rush on healthcare providers, forcing them to ration access.  Patients with unrelated illnesses die because they also can’t get into hospitals. Infant mortality increases because babies are born at home with little medical supervision.

Shortages of medical supplies and ventilators mean that the mortality of the virus goes higher.

Government action is largely ineffective because it focuses mostly on fiscal and monetary policy which are useless if everybody has to stay home.

Millions of people lose their job, income, and health insurance. Even if they are able to get COVID-19 care there is no way for them to get care for any preexisting condition.

This creates a sense of despair, people try to stay isolated, but many give up. National Guard and military intervention keeps people off the streets.

Delayed Chaos

This is an additional scenario that is worse that chaos because it is delayed and we are lulled into a false sense of confidence.

In this scenario the social distancing is effective in the short term and the weather reduces the transmission of the virus in the summer. However, in the fall the virus returns with a vengeance and catches the entire population by surprise.

Just as the weather cools and kids return to school the virus kicks back up and we are already social distance fatigued so we wait and see and the virus gets much worse.

This is what happened with the 2018 Spanish flu and is partly the reason why that epidemic was so bad (Kristoff).

Economic Consequences

The economy largely shut down for an extended period and we could see depression level unemployment ~25%.   Shutdown causes depression.  Supply chains are disrupted. 

The challenge in this scenario is that the economy pretty much ceases to exist. It is stopped and we are in a depression. The government is left with little to kickstart the economy.

Recovery might take years. 

Without government intervention supply and demand drives up the price of all medical equipment significantly. 

Industries that will do well

• Industries that help with “personal survival” prepping, that sort of thing. 
• Medical supplies and anything related to medical supplies.
• Personal defense will do well. 

Industries that will suffer

• All service industries, gyms, travel 
• Any discretionary spending: cars, consumer goods. 
• Most industries will struggle to recover.

From a planning perspective

This is a very grim scenario in which all bets are off. You will need to plan for survival and the long-term. Even this will pass, so you need to find a way to stay alive and ready.

Those companies able to keep their team and capabilities together will be well positioned to ride the wave up when the world comes back.

This is the type of experience that creates $100m companies out of $1m companies because the few small companies that survive are ready to take on the challenge of rebuilding.