Coronavirus . Stop covid or save the economy? We can do both.

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Contrary to what you’ve heard, shutting down the country is also the quickest way to get it started back up again

by David Rotman
April 8, 2020

Francesco Ciccolella

In the first employment report after social distancing measures had taken hold in many US states, the Department of Labor announced that 3.3 million people had filed jobless claims. A week later, in the first week in April, an additional 6.6 million claims came in—almost unfathomable compared with the previous record of 695,000, which was set in 1982.

As bad as those numbers are, though, they greatly understate the crisis, since they don’t take into account many part-time, self-­employed, and gig workers who are also losing their livelihoods. Financial experts predict that US GDP will drop as much as 30% to 50% by summer.

In late March, President Donald Trump warned against letting “the cure be worse than the problem itself” and talked of getting the country back to business by Easter, then just two weeks away. Casey Mulligan, a University of Chicago economist and former member of the president’s Council of Economic Advisers, warned that “an optimistic projection” for the cost of closing nonessential businesses until July was almost $10,000 per American household. He told the New York Times that shutting down economic activity to slow the virus would be more damaging than doing nothing at all.

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Eventually the White House released models suggesting that letting the virus spread unchecked could kill as many as 2.2 million Americans, in line with the projections of other epidemiologists. Trump backed off his calls for an early reopening, extending guidelines on social distancing through the end of April. But his essential argument remained: that in the coronavirus pandemic, there is an agonizing trade-off between saving the economy and saving lives.

Evidence from research, however, shows that this is a false dichotomy. The best way to limit the economic damage will be to save as many lives as possible.

A novel recession

Part of the difficulty with setting policy now is that the situation is unprecedented in living memory. “It’s impossible to know how the world is changing,” says David Autor, a labor economist at MIT. “It isn’t like anything we’ve seen in a hundred years.” In any past recession or depression, the economic solution has always been to stimulate demand for labor—to get workers back on the job. But in this case, we’re purposely shutting down economic activity and telling people to stay at home. “It’s not just the depth of the recession,” Autor says. “It’s qualitatively different.”

 

Five things we need to do to make contact tracing really work
Without federal leadership, the hard work of contact tracing is being left to a coalition of states, medics, and technology companies like Google and Apple. They can make it happen, but it won’t be easy.

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