As social restrictions from months of coronavirus isolation ease around the world, there’s growing optimism that perhaps the worst of the Covid-19 pandemic is over. Maybe all this talk of a dreaded global recession was just the fever dream of pessimistic economists. Hope springs eternal, but it doesn’t pay the bills. If the United States and other countries had actually taken steps to stem the spread of the virus, perhaps employers could resume hiring and consumers would get back to spending. Half of the world’s 10 largest economies are still trying to get the virus under control – the US, Britain, India , Brazil and Canada. In countries where the virus had been tamped down, including South Korea, new outbreaks have been reported. The first wave isn’t even over and politicians worldwide are declaring victory and rushing to reopen. Add geopolitical risks to the equation and the situation looks even more grim. The US and China, which together represent roughly 40 per cent of global gross domestic product, are still the twin engines of world growth. They are mired in a trade war, an ideological political battle and increasingly an economic unwinding that will diminish trade and investment for years to come. Without these two economies growing robustly, the whole world is going to experience a slowdown unlike others in recent history. During the last major recession in 2008-09, China’s economy was still the envy of growth. These days the government is unlikely to even broadcast dwindling economic targets. As much as countries want to get back to business as usual, a pandemic-induced recession is already spreading. The World Bank is forecasting a 5.2 per cent drop in global GDP for this year, the worst in decades. US Federal Reserve chair Jerome Powell said in recent testimony before Congress, “Until the public is confident that the disease is contained, a full recovery is unlikely.” Nations need to start implementing economic distress plans even as they await a near-mythical vaccine to be developed at warp speed. When the next coronavirus wave hits, and there is little doubt it will, more economic havoc will follow. Consumers will shun newly-opened stores. Office workers will quickly return to working from home, crushing economic activity in central business districts. This staunch belief in a V-shaped recovery, from Morgan Stanley economists to the White House, downplays serious risks that have already emerged. People are clearly eager to get out and spend. In New York City, bars and restaurants were already serving customers at roadside tables over the weekend ahead of the Phase 2 reopening. People were shedding their masks in public and gathering in groups, despite entreaties from Governor Andrew Cuomo to stay smart. Police cars circled the streets but didn’t bother to stop and enforce the restrictions. Businesses should also be hiring. The Federal Reserve has opened the floodgates of easy money and is now buying corporate bonds. Cash is pouring into equities, driving price-to-earnings ratios to heights not seen since the dotcom boom of the early 2000s. Mortgage loan applications are soaring along with future home construction permits as home loan rates drop to historic lows. US President Donald Trump was quick to take a victory lap, tweeting “Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected”. The rush of air from falling shouldn’t be confused with flying. Lost in the political spin is the mathematical fact that such a sharp percentage increase is up from a very low base after months of steep declines. America at a tipping point: will it regain its stature or decline further? The US is in an undeniable recession . Unemployment remains stubbornly high. Many who were sustained by minimal federal aid are going to lose their benefits soon and struggle again to make ends meet. They’re not going to be buying new TVs, cars and appliances – the bread and butter of recovery. For an economy flat on its back, getting on its knees may look like a substantial improvement. Trump, along with Treasury Secretary Steve Mnuchin and economic adviser Larry Kudlow, vowed against all advice that there will be no more shutdowns. Across the US, restaurants that recently reopened have already closed again as the virus re-emerged, no matter what the White House says about it. China also can’t seem to get back to normal. Incoming flights had been diverted from the capital to other cities, but that didn’t keep the virus from re-emerging. Beijing, which was largely cut off from the rest of the country during the worst of the outbreak in Wuhan, is now under a partial lockdown after a new outbreak was detected. Even the world-envied Chinese consumer is struggling. Weak demand is further suppressing post-coronavirus recovery despite a ramp-up in industrial production. Government production directives can often skew the numbers, making market demand-based growth harder to ascertain. Of the many lessons from ill-conceived recovery efforts, one stands out. Instead of channelling taxpayer money into corporate welfare schemes and bailouts, governments should be sustaining households and small businesses, the real engines of economic growth. Like the coronavirus, no country will be spared from the spread of recession. Blunting the depth and shortening the length is still possible. That will take a significant shift of political will to focus on consumers and a renewed emphasis on cooperation between nations to spur trade and investment. These actions can pull the world out of the worst of the downturn. Until that happens, even the current pessimistic predictions may look rosy in hindsight. Brian P. Klein, a former US diplomat, is the founder and CEO of Decision Analytics, a New York-based strategic advisory and political risk firm