ONE LEGACY of the covid-19 pandemic looks certain. Governments will be left with a mountain of debt. The IMF estimates that rich-world budget deficits will average 11% of GDP in 2020, even with no lockdowns in the second half of the year. Debt could climb from 105% to 120% of GDP. The good news is that interest rates are ultra-low, making debt-servicing cheap, and markets expect them to stay that way. Even so, hard choices lie ahead. After the second world war, when debt also soared, the burden was reduced through faster growth, higher taxation, artificial squeezes on interest rates and higher inflation, which all look improbable, unappealing or hard to manage. After the financial crisis of 2007-09, many governments chose austerity. But now voters are likely to want lavish spending, especially on health. Balancing budgets may be a defining challenge of the post-covid world.

On April 20th oil became less than worthless. The price of the May futures contract for West Texas Intermediate, the American benchmark, plummeted to -$40 a barrel. With the contract’s expiry imminent, traders owning oil to be delivered to Cushing, Oklahoma, realised that Cushing might have no space to store it. The price of the June WTI contract remained in positive territory; ditto Brent, the international benchmark, which is less prone to storage problems. But both remain nonetheless crushed by the covid-induced collapse of demand. Recent production cuts agreed on by OPEC and its allies have failed to halt the rout. The glut may persist into the summer, testing the bounds of possibility once more.

One reason for the implosion of demand for oil is that people are driving less. That is a catastrophe for the car industry, too. As buyers have put off purchases and factories have been locked down with the rest of the economy, car sales look likely to fall by a fifth this year. Carmakers are burning through cash, have cancelled dividends and are imploring governments for help. After the crisis, some people may have learned to live without cars. But even if sales recover, covid-19 will leave its mark, eg, on supply chains. And the loss of profits may crimp investment in the industry’s likely future, electric vehicles (even though they will become more competitive). But the industry should take control of its own fate: adapt, invest and consolidate.

Some countries are starting to lift lockdowns, believing their peak of coronavirus cases to have passed. These include Germany, which seems to have managed the crisis better than other big European countries, and several places in Asia. Some Republican-controlled states in the American South are doing the same. This looks much less wise. The coronavirus is spreading through southern states with unnerving speed. America as a whole is well behind the best-performing countries in testing and contact-tracing. The reopening states do not even meet the federal government’s own criteria for lifting lockdowns, including 14 days of declining cases and positive tests. More worrying, the South’s demography makes it vulnerable to covid-19. It contains a disproportionate number of old, black, Hispanic, uninsured, unhealthy and incarcerated Americans. The South could be the region that suffers most from the virus.