Not much can be done though. You either keep everything open, which will increase the transmission, and likely will increase the number of people needing healthcare services. Or you restrict what's open, require people to have face coverings, and hope that healthcare services aren't overrun. The only way to prevent getting to this point is to catch the initial transmission in the early days, contact trace, and require forced quarantine. Once the genie is out of the bottle so to speak, you just do what you can to slow the spread down enough to keep healthcare services afloat while either the population trends towards herd immunity or a vaccine is developed, tested, and administered.
Right now the world is somewhere between herd immunity and vaccine distribution. There is a chance those two lines could intersect at some point, or one could ultimately win out. Hopefully, the vaccine administration wins out in the end and people aren't too stupid to actually get it since our best chance of quelling the pandemic is the vaccine.
Is the long term economic impact going to be bad? Absolutely. I don't think you'll find anyone that denies that but you have to essentially figure out what's going to be the bigger problem, people losing their jobs or people losing their lives due to inadequate healthcare. This also doesn't take into account what the long term effects may or may not be either. If COVID leaves a significant number of people who were infected with lifelong problems, then you'll see the healthcare system continue to be strained for decades. As much as I hate government handouts, it seems like just printing money and paying people to stay home is the least bad option right now.
Also, no government wants to look inept and have the blood of thousands of its citizens on its hands. Doing what it can to save people from themselves at least make them look like they're doing something. There would be a massive uproar if major world governments just went "you know what go 🤬 off and die for all we care".