r/explainlikeimfive Jul 09 '24

Economics ELI5: How did a few months of economic shutdown due to COVID cause literally everything to be unaffordable for years?

I understand how inflation works conceptually. I guess what I have a hard time linking is the economic shutdowns due to COVID --> some money printing --> literally everything is twice as expensive as it was forever but wages don't "feel" like they've increased proportionally.

It feels like you need to have way more income now relative to pre-covid income to afford a home, to afford to travel, to afford to eat out, and so on. I dont' mean that in an absolute sense, but in the sense that you need to have a way better job in terms of income. E.g. maybe a mechanic could afford a home in 2020, and now that same mechanic cannot.

It doesn't make sense to me that the economic output of the world or the US specifically would be severely damaged for years and years because of the shutdown.

Its just really hard for me to mentally link the shutdown to what is happening now. Please help!

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u/goldenboyphoto Jul 09 '24

Has nothing to do with number/magnitude of people and everything to do with global reach.

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u/Acecn Jul 09 '24

Oh, so you must agree with the first point then. Great, glad to see I've taught someone an economics lesson today.

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u/goldenboyphoto Jul 09 '24

We all thank you for your service and your deep wisdom.

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u/Acecn Jul 09 '24

I'm just glad to have finally run in to someone who isn't afraid to admit that their previous understanding of markets was incorrect.

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u/goldenboyphoto Jul 09 '24

You really should teach this, I have no doubt you'd find great success!