E2: Rebooting the economy, understanding corporate debt, steps to avoid a depression & more with David Sacks

Evidence shows that by mid- to late April 2020, U.S. public and political debate had indeed shifted from immediate COVID-19 triage toward how and when to reopen the economy.

• On April 16, 2020, the White House formally issued the “Opening Up America Again” guidelines, a phased framework explicitly focused on conditions and timelines for relaxing restrictions and restarting economic activity, signaling that national-level discussion had moved to the reopening question. (trumpwhitehouse.archives.gov)
• In the second half of April, multiple news briefings and analyses revolved around reopening timelines and risks, with officials like Anthony Fauci publicly framing their comments around how to reopen without causing a rebound, rather than whether to remain in indefinite lockdown. (kffhealthnews.org)
• Beginning mid‑April 2020, a wave of anti‑lockdown “reopen” protests spread across many U.S. states (e.g., Michigan on April 15, Pennsylvania on April 20, Rhode Island on April 25, Alaska on April 23), explicitly demanding that states reopen their economies and lift stay‑at‑home orders—another indicator that public debate had pivoted to the “what now / how do we reopen” question. (en.wikipedia.org)
• Analyses of U.S. policy responses note that by late April 2020, federal actions (such as using the Defense Production Act to keep meat plants open) and state discussions were being driven by decisions about when and how to restart economic activity despite ongoing health risks, not by initial triage questions. (link.springer.com)

Taken together, these contemporaneous policy moves, protests, and media frames show that by the end of April 2020, the dominant U.S. debate had indeed shifted toward reopening the economy and exiting lockdowns, matching the substance of Sacks’s prediction that the big question by then would be “what now?”.

Evidence from California’s official timeline shows that statewide COVID-19 restrictions began to be relaxed earlier than mid–late May 2020, and certainly before June 1, 2020.

Key facts:

1. State announces move to Stage 2 starting May 8, 2020
   On May 4, 2020, Gov. Gavin Newsom announced that California would be prepared to move into the early phase of Stage 2 of reopening on Friday, May 8, explicitly described as “modifying the stay at home order” to allow gradual reopening of lower‑risk workplaces (bookstores, clothing stores, florists, sporting goods stores, etc.) with adaptations. (gov.ca.gov)

2. Guidance issued May 7; modifications effective May 8
   A May 7, 2020 press release from the Governor’s office confirmed that updated industry guidance would “help drive reopening” for retail, manufacturing, and logistics “beginning Friday, May 8”, and reiterated that California was “moving into Stage 2” of its roadmap, in which lower‑risk workplaces could gradually open. (gov.ca.gov)

3. Further statewide easing on May 12, 2020
   On May 12, 2020, the California Department of Public Health announced additional sectors that could open statewide as part of Stage 2, including some office workspaces where telework wasn’t possible, outdoor museums, and limited personal services (e.g., car washes, dog‑grooming, landscaping). The same notice states that California moved into Stage 2 on May 8, 2020. (news.caloes.ca.gov)

4. By May 12, Newsom said ~70% of the economy could open with modifications
   Also on May 12, 2020, Newsom said that “over 70% of our economy is open with modifications” under Stage 2, indicating that the lockdown had already been significantly and meaningfully relaxed by mid‑May, not June 1. (cnbc.com)

5. Late‑May brought even broader reopening in many counties
   Through the second half of May, numerous counties obtained variances to move further into Stage 2, allowing dine‑in restaurants, more in‑store retail, and eventually hair salons/barbershops to reopen with modifications. (aalrr.com)

Comparison to the prediction

• Chamath’s normalized prediction: “In California, statewide COVID-19 lockdown orders will not be meaningfully lifted before June 1, 2020; at best they may begin to be relaxed sometime between mid-May and late May 2020.”
• Reality:
  • The statewide order was first meaningfully modified on May 8, 2020, allowing a broad set of retail, manufacturing, and logistics businesses to reopen statewide with modifications—earlier than “mid‑May to late May.” (gov.ca.gov)
  • By May 12, Newsom was publicly stating that a large majority of the economy (about 70%) could operate with modifications, which constitutes a substantial easing well before June 1. (cnbc.com)

Because the first meaningful easing of the statewide lockdown (via Stage 2 modifications) occurred around May 8–12, 2020, earlier than both June 1 and the “mid–late May” window he gave as the earliest plausible relaxation, the prediction is best judged as wrong, though it was only off by roughly a week in timing.

Vaccine timing: Chamath said a COVID-19 vaccine was “at best 18 to 24 months” away from April 2020, implying no widely available vaccine before roughly October 2021.

• In reality, the Pfizer–BioNTech vaccine received FDA Emergency Use Authorization on December 11, 2020, and the U.S. vaccination program began immediately thereafter. (ama-assn.org)
• U.S. eligibility expanded rapidly; by April 19, 2021, all states had opened vaccination to all adults 18+, meaning vaccines were widely available to the general adult population about 12 months after his April 2020 statement, not 18–24 months. (cdc.gov)

Economic and social recovery: He also said that without a vaccine, the U.S. would “never get to 100% of where we were before” and that the next two years would involve “a tremendous amount of difficulty.” The U.S. did experience severe disruption through 2020–2022 (Delta and Omicron waves, uneven sectoral recovery), but key economic indicators recovered earlier than his framing suggests:

• U.S. real GDP returned to and then exceeded its pre‑pandemic (Q4 2019) level by Q1–Q2 2021, well before spring 2022. (presidency.ucsb.edu)
• Many states substantially lifted capacity limits and other business restrictions during spring–summer 2021, long before his implied two‑year horizon. (hr.dickinson-wright.com)

While his qualitative warning that the following two years would be very difficult was broadly true, the testable, quantitative core of the prediction—no widely available vaccine for 18–24 months—was clearly too pessimistic by roughly 6–12 months. On balance, that makes the prediction wrong overall.

Summary
Chamath predicted in April 2020 that "over the next two years, we're in for a tremendous amount of difficulty"—i.e., that from roughly April 2020 to April 2022, the US would experience significant, persistent economic and social disruption from COVID-19, rather than a quick return to normal. This is broadly correct given what actually happened.

Economic disruption (2020–2022)

1. Severe recession in 2020 and uneven recovery

   • US GDP contracted sharply in Q2 2020, with annualized declines of about 31%, followed by a partial rebound later that year.
   • The NBER dated a short but extremely deep recession in early 2020; employment did not recover to pre‑pandemic levels until well into 2022, showing persistent disruption rather than a swift, clean "V" back to normal.

2. High and persistent unemployment, then labor market churn

   • Unemployment spiked to nearly 15% in April 2020. It remained elevated for many months and different sectors (travel, hospitality, in‑person services) stayed depressed for an extended period. Even as headline unemployment improved, there was prolonged labor market disruption (e.g., labor force exits, the "Great Resignation" in 2021). This indicates ongoing difficulty rather than a quick snap‑back to 2019 conditions.

3. Supply‑chain shocks and inflation (2021–2022)

   • Global and domestic supply‑chain problems, shipping bottlenecks, semiconductor shortages, and other disruptions persisted through 2021 and into 2022.
   • US inflation rose substantially in 2021–2022, reaching multi‑decade highs, in part due to pandemic‑related distortions. This materially affected real incomes and business costs, extending the economic difficulty beyond the initial 2020 shock.

Social disruption (2020–2022)

1. Extended non‑normal social conditions

   • Widespread school closures and remote learning lasted through much of the 2020–2021 academic year in many states, with knock‑on effects into 2021–2022.
   • Office work shifted massively to remote/hybrid, and many workplaces did not return to anything like “normal” operations until late 2021 or 2022, if at all.

2. Ongoing waves and restrictions

   • Multiple COVID waves (fall/winter 2020–21, Delta in 2021, Omicron in late 2021–early 2022) led to repeated cycles of public‑health measures, travel disruptions, and behavioral changes. This clearly contradicts any idea of a quick one‑time shock followed by normalcy.

3. Mental health and societal strain

   • The period saw documented increases in anxiety, depression, substance‑use issues, learning loss, and political conflicts over COVID policies, illustrating that the social disruption was prolonged and multifaceted.

Why the prediction is judged right

• Time horizon alignment: The forecast covered “over the next two years” from April 2020—roughly April 2020 to April 2022. That interval did, in fact, see:
  • Continuing health crises in multiple waves.
  • Deep labor and supply‑chain disruptions.
  • Elevated inflation and uneven employment recovery.
  • Prolonged changes to schooling, work, travel, and daily life.
• Nature of disruption: Chamath did not specify precise metrics (e.g., exact GDP or unemployment numbers) but qualitatively forecast “a tremendous amount of difficulty” and no quick reversion to normal. The actual path of the US economy and society from 2020 through early 2022 matches that qualitative description.

Given the broad, qualitative nature of the claim and the documented economic and social conditions during that period, the most reasonable assessment is that the prediction was right in substance.

What was predicted

David Sacks forecast that, due to COVID‑19:

1. U.S. unemployment would rise from around 15% toward 25–30%.
2. U.S. real GDP in the next reported quarter (Q2 2020) would contract by about 25–33% at an annualized rate.

What actually happened

1. Unemployment:

   • The official U.S. unemployment rate (BLS U‑3) peaked at 14.7% in April 2020, then fell to 13.3% in May and 11.1% in June, never reaching the 25–30% range Sacks described. (bls.gov)
   • The BLS noted misclassification issues that likely understated unemployment by about 5 percentage points in April and May, implying a true rate around 19–20% at the peak, but still far below 25–30%. (forbes.com)
   • No standard unemployment measure (U‑3, or the broader U‑6) approached 25–30%; U‑6 was about 22.8% in April 2020. (cnbc.com)

2. GDP contraction (Q2 2020):

   • The Bureau of Economic Analysis reports that real GDP decreased at an annual rate of 31.4% in Q2 2020, squarely within Sacks’s projected 25–33% contraction band. (apps.bea.gov)

Assessment

The forecast was a conjunction: unemployment rising from ~15% to roughly 25–30%, and GDP in Q2 2020 contracting by ~25–33% annualized. While he was very accurate on the GDP contraction, the unemployment call was materially off; unemployment peaked well below his 25–30% range on any standard measure.

Because the unemployment portion clearly did not come true, the combined prediction is best classified as wrong overall, albeit with a correct GDP sub‑prediction.

Assessment of the conditional

• The prediction’s condition was that the acute COVID-19 crisis and associated shutdowns in the US would last significantly longer than a few months / well beyond mid‑2020. In fact, while the official recession was brief (February–April 2020), public‑health emergency status continued until May 11, 2023, and major sectors (schools, entertainment, offices, travel) faced substantial restrictions and depressed activity well past mid‑2020.(en.wikipedia.org) This is a reasonable match to the “lasts longer than a few months” scenario Sacks was worried about.

Did policy interventions "fail" and cause a systemic unraveling?

1. Macroeconomic trajectory:

   • Real US GDP fell 3.5% in 2020, but then grew about 5.7% in 2021, the fastest annual growth since the 1980s, and continued to expand in 2022.(en.wikipedia.org) NBER later dated the recession as lasting just two months (Feb–Apr 2020), with the economy returning to expansion from May 2020 onward.(cnbc.com) This pattern is inconsistent with a prolonged, uncontrolled “great unraveling” of the US economy.

2. Effectiveness of fiscal and monetary support:

   • Large federal relief packages (CARES Act, later stimulus, and the 2021 American Rescue Plan) plus aggressive Federal Reserve actions (rate cuts, liquidity facilities, asset purchases) are widely credited with stabilizing financial markets and supporting demand. The NBER notes that policy support helped halt the sharp GDP collapse, and Treasury Secretary Janet Yellen has argued that COVID stimulus prevented millions of additional job losses and a far deeper slump.(upi.com) This directly contradicts the prediction that interventions would “slip out of their hands” and fail to stabilize the system.

3. Corporate defaults and bankruptcies:

   • Corporate distress did rise, but not to systemic‑collapse levels. Moody’s reports that in 2020 the speculative‑grade default rate (by dollar volume) was about 6.3%, elevated relative to the long‑run average (~4.2%) but far below peaks seen in true systemic crises.(scribd.com)
   • After heavy support and very low interest rates, defaults and formal bankruptcies fell in 2021–2022 and only later climbed again as high rates and post‑COVID pressures hit, with 2024 corporate bankruptcies reaching the highest level since 2010. Even then, analysts described risks as elevated but not system‑threatening, not a broad financial collapse.(ft.com) This is a notable wave of distress in specific sectors, but not the across‑the‑board “cascade” foreseen.

4. Overall financial and economic system stability:

   • Despite severe short‑run damage (record job losses, a historic but brief GDP plunge), the combination of fiscal and Fed actions prevented a breakdown of core financial institutions or credit markets. By late 2020 and 2021, equity markets and corporate bond issuance had largely recovered, and the economy transitioned into a strong, if inflationary, expansion rather than a depression‑like unraveling.(en.wikipedia.org)

Conclusion

• The condition Sacks specified—COVID and related shutdowns lasting well beyond a short, temporary shock—did materialize. However, his predicted outcome—that in this case interventions would lose control, producing a cascading wave of defaults, bankruptcies, and an effective “great unraveling” of the US economy—did not occur. The recession was deep but extremely short, the financial system remained intact, and the subsequent recovery was historically strong. On that basis, this prediction is wrong.

Why it’s hard to grade definitively

Chamath’s prediction (11 April 2020) was essentially:

1. Baseline: California would not be "out of lockdown" before June 1, 2020.
2. Conditional: If April case curves were decaying, Governor Newsom would lift the lockdown sometime between mid‑May and late May 2020 at the earliest.

The problem is what counts as “lifting” or being “out of lockdown”:

What actually happened in California

• California’s statewide stay‑at‑home order was issued March 19, 2020 and remained in force as the legal framework throughout 2020; it was not fully terminated until June 15, 2021, when Newsom lifted the stay‑at‑home and tier system as the state “fully reopens.” (gov.ca.gov)
• On April 14, 2020, Newsom outlined six indicators that would guide when and how to modify the stay‑at‑home order, explicitly tying reopening to sustained flattening/decline of hospitalizations and other metrics. (gov.ca.gov)
• On May 4, 2020, Newsom announced that, based on progress on those indicators, California could move into the early phase of Stage 2 on Friday, May 8, beginning to modify the stay‑at‑home order. This allowed certain lower‑risk workplaces (e.g., curbside retail, some manufacturing and logistics) to reopen with adaptations. (gov.ca.gov)
• On May 7, the state released detailed industry guidance and confirmed that California would begin modifying the stay‑at‑home order on May 8 with these partial reopenings. (gov.ca.gov)

So:

• Partial easing / modification of the “lockdown” clearly started May 8, 2020 (early–mid May).
• Legal end of the stay‑at‑home order and most associated restrictions did not occur until June 15, 2021.

Comparing to Chamath’s prediction

1. "We’re not going to get out of lockdown until June 1 at the earliest"

• If you interpret “get out of lockdown” to mean any significant easing or modification of the stay‑at‑home regime, this is false: the state began reopening (Stage 2, curbside retail and more) on May 8, 2020, well before June 1. (gov.ca.gov)
• If you interpret it as fully ending the stay‑at‑home order and returning to broadly normal activity, then it is actually too optimistic: the order and tiered restrictions persisted long past June 1, 2020 and were only fully retired in June 2021. (gov.ca.gov)

2. "If April curves are decaying, it’s going to be mid‑May to late May before he lifts this thing"

• By mid‑April, Newsom was already talking about flattening curves and criteria for modifying the order. (gov.ca.gov)
• The first concrete easing of restrictions tied to those criteria began May 8. That’s slightly earlier than “mid‑May”, but within the same general mid‑May timeframe that he described.

So under a partial‑reopening definition of “lift,” the timing of lifting (early–mid May rather than mid–late May) is roughly in the ballpark, but the "not before June 1" component is wrong; under a full‑end‑of‑order definition, the “not before June 1” is right but the idea that the lockdown would be lifted around May/June 2020 at all is wrong.

Why the verdict is ambiguous

• The prediction bundles together conflicting timing statements ("not…until June 1" vs. "mid‑ to late May") and uses an imprecise concept (“get out of lockdown,” “lift this thing”) in a situation where California explicitly chose a phased modification of the stay‑at‑home order rather than a single clear lifting date.
• Depending on which reasonable interpretation you adopt—any easing vs. full termination of the order—you can argue it was partly right or clearly wrong.

Because the outcome hinges on subjective interpretation of “lockdown lifted” rather than on a clean factual discrepancy, the prediction cannot be graded as simply right or wrong; hence "ambiguous".

The prediction has two main parts: (1) U.S. state and local rainy‑day funds would be exhausted by the COVID shock, and then (2) the federal government would bail out states and municipalities with large aid packages in 2020–2021.

1. Were rainy‑day funds exhausted?

Evidence from Pew and NASBO shows that while many states tapped their rainy‑day funds in FY2020, they were not exhausted in aggregate:

• Pew reports that in FY2020, 15 states drew on rainy‑day funds, but nationwide balances only fell from about $78.7B to $71.6B, still near a record high. (pew.org)
• Only a very small number of states (notably Nevada and New Jersey) actually drained their rainy‑day funds to zero; most others retained substantial reserves. (pew.org)
• NASBO later notes that fears of widespread depletion “did not come to pass”: by FY2021, state rainy‑day balances had increased 58% over FY2020 to a new record ($121.8B), and continued to new highs in subsequent years. (community.nasbo.org)

So while some states used their funds heavily, state and local rainy‑day funds were not broadly exhausted during 2020–2021; in fact, on average they rebounded to record levels quite quickly.

2. Did the federal government bail out states and localities?

This part of the prediction is accurate:

• The CARES Act (March 27, 2020) created the Coronavirus Relief Fund with $150B in direct assistance to state, local, tribal, and territorial governments. (congress.gov)
• The American Rescue Plan Act (March 11, 2021) then provided roughly $350B in State and Local Fiscal Recovery Funds to help cover revenue shortfalls and pandemic-related costs. (home.treasury.gov)

These are precisely the kind of large federal aid packages (“bailouts”) he anticipated.

Overall assessment

Because the prediction, as normalized, hinges on rainy‑day funds being exhausted first and then a bailout, and the empirical record shows broad non‑exhaustion of those funds even as large federal aid arrived, the core conditional claim is not borne out. The federal bailout occurred, but the prerequisite exhaustion of rainy‑day funds did not, so the overall prediction is best classified as wrong.

Did the condition happen? (V-shaped recovery before Nov 2020)

• After the sharp COVID-19 contraction in March–April 2020, U.S. real GDP rebounded strongly in Q3 2020, growing at a 33.4% annualized rate after a 31.4% annualized drop in Q2.
• Unemployment fell rapidly from the April 2020 peak (~14.7%) down into single digits by late summer/early fall 2020. This pattern is widely described in contemporaneous economic commentary as a partial or incomplete V-shaped recovery: a very sharp rebound, but not a full return to pre‑COVID trend, and with large sectors still depressed.
• So, whether the U.S. had a true V-shaped recovery is debated, but there clearly was a strong, V‑like rebound in headline GDP and jobs before November 2020. That means the condition in Chamath’s prediction is at least partially met in the way many commentators at the time used the term.

Did the predicted outcome happen? (Trump wins by a landslide)

• In the November 3, 2020 U.S. presidential election, Donald Trump lost to Joe Biden. Biden won both the national popular vote and the Electoral College: 306 electoral votes for Biden vs. 232 for Trump, and a popular vote margin of over 7 million votes. This is the opposite of Trump winning in a “landslide.”

Conclusion

Even allowing for debate over how perfectly “V-shaped” the recovery was, Trump clearly did not win re‑election, let alone in a landslide. The conditional prediction therefore failed on its stated outcome, so the prediction is wrong.

What happened:

• U.S. unemployment peaked at 14.7% in April 2020 but had fallen to 6.9% by October 2020 and 6.7% in November 2020, well below the 16–22% range mentioned in the prediction. (bls.gov)
• In the November 3, 2020 election, Donald Trump lost to Joe Biden, who won 306 electoral votes to Trump’s 232. (en.wikipedia.org)

Why the prediction is ambiguous:

• Chamath’s claim was explicitly conditional: if unemployment were around 16–22% going into the election, then “you could field the prancing dog and he’ll beat Trump.”
• That condition did not occur; unemployment was under 7% by the election period, so the specific scenario he described never materialized.
• Because the antecedent of his conditional prediction was false, we cannot empirically test whether, under 16–22% unemployment, Trump would indeed have lost even to a very weak opponent. The fact that Trump lost to Biden at a much lower unemployment rate is consistent with his intuition that very high unemployment would doom Trump, but it does not confirm or falsify the exact prediction as stated.

Therefore, the appropriate evaluation is “ambiguous”: there isn’t enough real-world evidence to determine whether his conditional claim was right or wrong.

Reasoning

1. Size of U.S. fiscal COVID relief
   Multiple nonpartisan and official oversight sources put total federal pandemic relief at a little over $5 trillion:

   • The Pandemic Response Accountability Committee (PRAC), created by the CARES Act, describes its mandate as overseeing the $2.2T CARES Act plus 5 other pandemic-related laws totaling over $5T in government funds. (en.wikipedia.org)
   • Analyses of where those funds went (direct payments, unemployment supplements, PPP, state/local aid, etc.) similarly summarize “over $5 trillion in direct relief spending”. (taf.org)
   • The Tax Policy Center’s briefing on the fiscal response estimates about $5.6T in federal tax cuts and spending hikes enacted as COVID relief. (taxpolicycenter.org)

2. Scale of Federal Reserve (monetary) support
   The Fed’s unconventional monetary actions mainly show up as balance-sheet expansion:

   • CRS reports the Fed’s balance sheet grew from $4.7T in March 2020 to almost $9T in May 2022, an increase of about $4.8T attributable to the COVID period. (congress.gov)
   • Financial press and Fed commentary consistently describe this as a peak around $9T, after which quantitative tightening began to shrink it back toward ~$6.6–7T. (wsj.com)

3. Combined scale vs. the prediction

   • Adding the fiscal support (~$5–5.6T) to the monetary expansion (~$4.8T) yields a combined figure on the order of $10T–10.5T in extraordinary U.S. COVID-era fiscal + monetary support, even before adjusting for overlaps (e.g., the Fed buying Treasuries issued to finance fiscal packages). (taxpolicycenter.org)
   • Independent trackers like the Committee for a Responsible Federal Budget’s COVID Money Tracker similarly find that, even counting “amount allowed” (authorizing ceilings for loans, guarantees, and facilities), U.S. support peaks in the high single-digit to low-teens trillions—well below $20T. (crfb.org)

4. Comparison to U.S. GDP and possible source of the $20T figure

   • U.S. nominal GDP in 2020 was about $21–22T. (srv1.worldometers.info)
   • Thus, the combined support of roughly $10T is around 45–50% of one year’s GDP, not “one times U.S. GDP.”
   • A roughly $20T number does match some estimates of global fiscal + monetary stimulus during the early pandemic (about $8T monetary and $12T fiscal worldwide), not the U.S. alone. (talkmarkets.com)

Because all credible tallies of U.S.-only fiscal and monetary COVID-19 support cluster around $10T, roughly half of U.S. GDP, and no reasonable accounting brings the U.S. total near $20T ≈ 1× GDP, Chamath’s prediction that the U.S. “final number” would be on the order of $20T, about one year of U.S. GDP is substantially off.

Conclusion: the prediction is wrong.

Assessment Chamath predicted that the U.S. would respond to COVID-19 with a China‑2009–style mix of very large fiscal and monetary stimulus, which would lead to (1) significant misallocation of capital / “fake growth” and (2) high inflation in subsequent years. Looking at 2020–2024 data, both elements are borne out.

1. Very large U.S. fiscal + monetary stimulus did occur

Fiscal:

• The U.S. enacted multiple huge COVID packages: the CARES Act (~$2.2T, March 2020), the Consolidated Appropriations Act (~$900B, Dec 2020), and the American Rescue Plan (~$1.9T, March 2021), among others. Estimates of total discretionary COVID fiscal measures run to several trillion dollars, on the order of 25% of U.S. GDP when broadly counted.

Monetary:

• The Federal Reserve cut rates to near zero in March 2020 and launched massive quantitative easing, expanding its balance sheet from under $4.2T in early 2020 to almost $9T by 2022, the largest and fastest expansion in modern U.S. history.

This is consistent with the “combination of fiscal and monetary stimulus” Chamath referenced, similar in spirit to China’s 2009–2010 response.

2. High inflation in subsequent years

• U.S. CPI inflation, which had averaged around 2% pre‑COVID, surged beginning in 2021:
  • 2021: annual CPI inflation around 4.7%.
  • 2022: annual CPI inflation around 8.0%, the highest since the early 1980s.
  • Mid‑2022 year‑over‑year CPI peaked at about 9.1%.
• Major analyses from the Federal Reserve, IMF, and academic economists attribute a substantial share of this surge specifically to the large, deficit‑financed fiscal packages interacting with easy monetary policy—i.e., demand stimulated well beyond supply capacity, contributing materially to inflation (along with supply shocks, energy prices, etc.).

Thus the “massive inflation” part of the prediction clearly materialized in the years after the 2020–2021 stimulus.

3. Misallocation of capital / “fake growth”

While “fake growth” is not a precise technical term, observable signs of significant misallocation of capital and distorted financial conditions appeared after the stimulus:

• SPAC mania and speculative IPO boom (2020–2021): SPAC issuance and speculative growth IPOs exploded, then collapsed. Many deals later traded far below issue price or were liquidated, widely described as a bubble enabled by ultra‑easy money and stimulus‑driven liquidity.
• Meme‑stock and crypto bubbles: Enormous retail speculation in meme stocks (e.g., GameStop, AMC) and a massive run‑up in crypto assets, followed by sharp crashes in 2022–2023. Analysts and central‑bank commentary tied a portion of this risk‑taking to abundant liquidity and stimulus checks boosting retail trading.
• "Zombie" firms and cheap debt: Research and commentary documented an increase in highly indebted or unprofitable firms kept alive by extremely low rates and accommodative credit markets, with concern that cheap capital was flowing into low‑productivity uses rather than sustainable investment.
• Rapid reversal of growth once support and easy money faded: As rates rose sharply in 2022–2023 to fight inflation, many of these boom sectors (SPACs, profitless tech, crypto) experienced severe drawdowns, and startup/VC funding retrenched dramatically, consistent with the idea that some of the prior “growth” was largely financial‑conditions‑driven rather than fundamentally sustainable.

All of these patterns are consistent with significant capital misallocation and overstated or low‑quality growth fueled by the stimulus period.

Conclusion

• Core mechanism predicted: very large fiscal plus monetary stimulus ✔️
• Outcome 1 – high inflation in subsequent years: clearly occurred (2021–2023 inflation spike to multi‑decade highs) ✔️
• Outcome 2 – misallocation / “fake growth”: strong evidence in post‑2020 bubbles (SPACs, meme stocks, crypto, zombie firms) and subsequent busts ✔️

Given that both the macro‑inflation outcome and clear signs of capital misallocation materialized in the years after the COVID stimulus, Chamath’s prediction is best judged as right.

Joe Biden ultimately became and remained the 2020 Democratic Party nominee for president and headed the ticket in the general election against Donald Trump; he was not replaced by any “dark-horse” candidate.

Therefore, the prediction that the probability of a dark-horse candidate emerging to replace Biden on the Democratic ticket in 2020 was effectively zero turned out to be correct.

Joe Biden secured enough delegates to become the presumptive Democratic nominee in early June 2020 and was formally nominated at the Democratic National Convention in August 2020, heading the ticket with Kamala Harris as his running mate. He remained at the top of the ticket through Election Day on November 3, 2020, ultimately winning the presidency; there was no replacement of Biden as the nominee during the 2020 campaign.

Authoritative sources documenting this include:

• Biden surpassing the delegate threshold and becoming the presumptive nominee in June 2020.
• His formal nomination at the August 2020 Democratic National Convention.
• The certified 2020 general election results listing Joe Biden as the Democratic candidate for president.

No credible record shows a serious health emergency leading to Biden being replaced on the ticket in 2020. Therefore, Sacks’s conditional prediction — that Biden would remain the Democratic nominee and not be replaced at the top of the ticket absent a major health event — matches what actually happened, and is rated right.

Evidence from spring–early summer 2020 shows that the central COVID-related political fight in the U.S. did indeed shift to how and when to exit lockdowns, matching Sacks’s prediction.

Key points:

• By early April 2020, roughly 42 U.S. states already had some form of stay‑at‑home or lockdown order, so the main policy question was no longer whether to impose them but what to do next. (en.wikipedia.org)
• Beginning in mid‑April 2020, coordinated “reopen” protests spread across numerous states. These protests explicitly demanded that states be “re-opened” and focused on the economic and social costs of ongoing restrictions, not on debating initial imposition. (en.wikipedia.org)
• On April 16, 2020, the White House released the “Opening Up America Again” guidelines, a three‑phase plan for rolling back restrictions; this triggered a high‑profile political dispute over how quickly to reopen and who had authority—Trump or the governors—again centering the debate on exit strategy and timing. (de.wikipedia.org)
• Multiple interstate compacts (e.g., the Western States Pact and similar northeastern/midwestern agreements) were formed specifically to coordinate the rollback of economic restrictions, reinforcing that many governors framed the main policy challenge as managing reopening. (en.wikipedia.org)
• Retrospectives on 2020 U.S. politics note that pandemic response became a major election issue, with Democrats generally favoring cautious reopening and Republicans pushing a faster return to a fully open economy—again, a dispute over how and when to exit restrictions. (en.wikipedia.org)

It is true that by late May and through summer 2020, the murder of George Floyd and the ensuing Black Lives Matter protests became a dominant national political issue. (en.wikipedia.org) However, within the domain Sacks was clearly talking about—COVID policy—the near‑term “next big political debate” in spring–early summer 2020 was indeed about strategies and timing for getting out of quarantines and lockdowns, not about whether to impose them. Therefore the prediction is best judged as right.

Sacks’ prediction was that if the COVID‑era U.S. recovery was V‑shaped by the November 2020 election, Donald Trump would be a “shoo‑in” for re‑election.

By late 2020, many in Trump’s own camp were explicitly describing the rebound as a V‑shaped recovery, pointing to record Q3 GDP growth (+33.1% annualized after a ‑32.9% collapse in Q2) and strong stock‑market gains. Republican materials from the House Ways and Means Committee touted the Q3 bounce as “historic growth” pointing to a V‑shaped recovery. (cnbc.com) However, the recovery was incomplete: the unemployment rate was 6.9% in October 2020, nearly double the 3.5% rate in February, and only about 54.5% of the 22.2 million jobs lost from February to the trough had been regained. (bls.gov) Real GDP in Q4 2020 remained about 2.4% below its pre‑pandemic peak in Q4 2019, and did not rise above the pre‑COVID level until mid‑2021. (cbpp.org) Other observers, including Joe Biden, instead characterized the pattern as a K‑shaped recovery, reflecting its unequal impact. (aljazeera.com)

Crucially, regardless of how one labels the recovery’s “shape,” Trump did not win re‑election. Joe Biden won the 2020 presidential election with 306 electoral votes to Trump’s 232 and a popular‑vote margin of over 7 million. (britannica.com) Since the economic rebound was widely portrayed by Trump’s own team as V‑shaped yet Trump was not a “shoo‑in” and in fact lost, Sacks’s conditional prediction did not come true. Therefore, it is best scored as wrong.