- Some conservatives have suggested that the US can either save lives in the coronavirus pandemic or the economy.
- Economists say no trade-off has to be made.
- Experts say the only way to rescue the economy is to end the pandemic that’s already claimed over 2,000 lives in the US.
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The economy has effectively been shut down in the wake of the coronavirus pandemic. Spread of the illness has forced millions of American workers to lose their jobs as companies close, and it’s not clear how many businesses will open their doors again.
The situation has led some conservatives to suggest the nation is now at a crossroads: It must decide whether to save lives from the coronavirus or restart the engines of economic growth.
President Trump said earlier this month the cure for the virus “can’t be worse than the problem itself,” a line of argument he initially adopted but appears to be backing off from for now.
But economists are arguing there is no trade-off that has to be made. They say the government can, and must, take aggressive measures to curb the spread of the coronavirus by shuttering businesses and keeping tens of millions of people at home. It’s the only way to end the outbreak and the pain it’s inflicting on the economy.
Washington Post opinion columnist Catherine Rampell summed up the logic among economists.
“If you listen to Trump, Kudlow or other WH aides, you might think we have to choose between what’s optimal for public health and what’s optimal for the economy,” she said in a tweet. “Save lives, or maximise GDP. But if you listen to actual economists, you’ll learn this is a false choice.”
The IGM Forum, part of the University of Chicago Booth School of Business, recently surveyed prominent economists and found the vast majority (80%) said they believed that abandoning the drastic lockdowns now would lead to “greater total economic damage” down the road. None disagreed.
Survey of leading economists:
"Abandoning severe lockdowns at a time when the likelihood of a resurgence in infections remains high will lead to greater total economic damage than sustaining the lockdowns to eliminate the resurgence risk."
— Justin Wolfers (@JustinWolfers) March 29, 2020
The survey isn’t conclusive, but it’s an important gauge showing there is little evidence of any daylight between economists and public health experts on the critical need to address the coronavirus crisis with bold measures.
Lawrence Summers, a former Treasury secretary under President Clinton, said in a Post op-ed published last week that rolling back restrictions would only worsen public health conditions later – and lead to a greater loss of life that harms the economy even more.
“If restrictions are lifted prematurely, the result will be a follow-on pandemic surge. More people will die. What will the policy choice be then?” he wrote. “If it is a return to restriction, starting from a much less favourable point and much more disease spread, then the cumulative economic loss will be greatly magnified. The costs we have already borne will have been totally in vain.”
Read more: ‘The worst bear market of our lifetime’: A Wall Street investment chief who predicted the recession says stocks may fall 64% before the dust settles – and lays out 3 trades set to profit from the coronavirus crash
It’s an area of agreement stretching across party lines. Recently, 32 top economic policymakers who served the last three presidential administrations put out a letter arguing there is no tension between improving the public health response and shoring up the economy.
“Saving lives and saving the economy are not in conflict right now; we will hasten the return to robust economic activity by taking steps to stem the spread of the virus and save lives,” the letter said.
Among economists, there’s widespread belief that lawmakers haven’t invested enough money into the healthcare system, which is grappling with a surge of coronavirus cases in the US.
The same Chicago poll found 93% of economists said they believed that in an “optimal” situation, the government would be more aggressively funding to expand coronavirus testing and hospital capacity, and purchasing more equipment like ventilators to end the public health emergency.
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