How bad could it get?

Global recession has gone from being a far-off possibility to a near certainty

TORONTO – More than a century ago, with the world in the throes of the Spanish flu pandemic, business in Little Rock, Arkansas, was not exactly booming.

Companies in the state capital were losing more than US$130,000 a day on average, a report by the Federal Reserve Bank of St. Louis found. Perhaps the only exception was the drug store — and the mattress sellers.

“Bed rest is emphasized in the treatment of influenza,” reported The Arkansas Gazette, according to the Fed’s summary. “As a result, there has been an increase in demand for beds, mattresses and springs.”

It was a difficult time, and one in which there are echoes today, as a global health crisis threatens to unleash an economic downturn of unknown depth.

So far, more than 200,000 cases of the novel coronavirus have been reported to the

World Health Organization, and more than 8,000 deaths.

Global recession has gone from being a far-off possibility to a near certainty, and some are even raising the spectre of a worse fate.

“We are facing a period of profound adversity unlike any we have since the 1930s,” Alberta Premier Jason Kenney said Thursday.

While not all are willing to entertain the possibility of an economic depression, the question of just how bad is this going to get is very much in play.

From a health point of view, we have not reached the dark days of the 1918 pandemic, which killed millions.

In a city like Philadelphia, “bodies lay along the streets and in morgues for days, similar to medieval Europe during the Black Death,” according to the Fed report.

The same flu outbreak “paralyzed” the Canadian economy, according to the federal government, which was so harshly criticized at the time it was prompted to create a national health department.

But health care has modernized, governments are preparing to unleash billions of dollars in stimulus spending, and there may be a lot of pent-up demand to boost the economy when the pandemic finally subsides.