Let me start by saying I do not know the answer to this question.
It’s a terrible question to ponder, but I expect policymakers from federal to state to local will be grappling with this in the next 30 days.
A couple of observations to start.
- Many businesses will not last if they remain closed. Sounds up front, but it’s important to acknowledge. There is only so much some businesses can do online. Vulnerabilities vary by ownership and service set. Restaurants, bars, entertainment and fitness centers are on the front lines. Other services like accounting and law and marketing less exposed (the last is an industry that may even do better).
- Consumer spending drives the economy. Upwards of 70% of the economy is tied to that in some way. Cut that by even 1/3 and in you’re in a sharp recession.
- Americans lack reserves. We have heard about how many Americans are one health crisis from financial destruction. Well, what about 2 to 3 months with no pay? That’s much more costly, plus unemployment doesn’t cover everyone and all expenses. I have heard no talk of suspending mortgages, helping with rent or credit card payments, which would be MUCH more valuable than the checks being talked about.
- Coronavirus will kill a lot of Americans, but we have some control. Coronavirus projections have it killing anywhere from 200,000 to 3 million Americans before it’s done. The higher numbers are if we intervene less.
- Our healthcare infrastructure is not set up for this. Even with our steps to date, coronavirus could swamp our healthcare infrastructure, leading to still more deaths (some not related to coronavirus!)
- Time is key. Every week we are on lockdown is a week closer to adjusting our healthcare, studying the virus, trying new treatments, flattening the curve and so on. Every week we are on lockdown is a week that we slow the virus’ spread, at least some. And every week that goes by businesses are further stressed nationally and in an unprecedented way where more of them will never reopen.
- Economic distress kills people. Finding statistics on this is hard, although just one study found 10,000 killed themselves in the Great Recession in what are likely conservative numbers. Economic distress also leads to spikes in things like domestic violence (even without quarantines).
- Economic distress can take years to recover from, exacting further tolls. Do you remember how fast we bounced back in the Great Recession? Neither do I.
So the question: At what point does the level of economic disaster become worse or more pressing than the healthcare disaster?
In our 21st century society and free flow of information we have access to the tradeoffs in a way that no one else ever has. The bottom line is that we can save 2+ million of our fellow citizens with our sacrifice. But is that sacrifice finite? Is the limit 10% unemployment as businesses collapse? Or 20% unemployment with more of the house coming down into a new Great Depression that lasts years? Or is there no level of economic collapse that would justify opening things back up sooner, knowing that that will accelerate coronavirus spread, at least some?
Again, I do not know the answer. What do you think?