A series of aggressive restrictive measures were adopted around the world in 2020–2022 to attempt to prevent SARS-CoV-2 from spreading. However, it has become increasingly clear the most aggressive (lockdown) response strategies may involve negative side-effects such as a steep increase in poverty, hunger, and inequalities. Several economic, educational, and health repercussions have fallen disproportionately on children, students, young workers, and especially on groups with pre-existing inequalities such as low-income families, ethnic minorities, and women. This has led to a vicious cycle of rising inequalities and health issues. For example, educational and financial security decreased along with rising unemployment and loss of life purpose. Domestic violence surged due to dysfunctional families being forced to spend more time with each other. In the current narrative and scoping review, we describe macro-dynamics that are taking place because of aggressive public health policies and psychological tactics to influence public behavior, such as mass formation and crowd behavior. Coupled with the effect of inequalities, we describe how these factors can interact toward aggravating ripple effects. In light of evidence regarding the health, economic and social costs, that likely far outweigh potential benefits, the authors suggest that, first, where applicable, aggressive lockdown policies should be reversed and their re-adoption in the future should be avoided. If measures are needed, these should be non-disruptive. Second, it is important to assess dispassionately the damage done by aggressive measures and offer ways to alleviate the burden and long-term effects. Third, the structures in place that have led to counterproductive policies should be assessed and ways should be sought to optimize decision-making, such as counteracting groupthink and increasing the level of reflexivity. Finally, a package of scalable positive psychology interventions is suggested to counteract the damage done and improve humanity's prospects.