At the root of the president’s rhetoric on the issue, economists across the political spectrum say, is a false choice between economic growth and protecting public health.
“The loss of life we’re talking about exceeds wars we’ve been in,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago, projecting the potential death toll if the virus were allowed to spread unchecked. The permanent damage that could inflict on the US economy “would be hard to ever recover from. As hard as all of this is, the cost-benefit is pretty easy,” she said of the current restrictions on American life.
Medical experts, many of whom are coordinating the response at Boston’s top hospitals, agreed.
“We have to get this under control before we can start thinking about saving our economy,” said Rick Malley, an infectious disease doctor at Boston Children’s Hospital.
Malley and others said one of the trickiest aspects of fighting this virus is the delayed onset of symptoms. Many people have no idea they are carrying COVID-19 until days after they have already infected others.
“That is why one has to be very careful about relaxing these restrictions too soon, because this virus will come back,” Malley said. “Many scientists and physicians and people like myself are really quite concerned that this idea that maybe we should loosen these restrictions is really massively premature.”
But the president appears increasingly impatient with those restrictions and their ripple effects in the economy.
“We can’t let the cure be worse than the problem,” Trump said at the daily White House coronavirus briefing on Monday. He doubled down on that sentiment Tuesday on Twitter and in a Fox News virtual town hall, saying, “We have to open this country up, we can social distance ourselves and go back to work.”
Former vice president Joe Biden, the leading contender for the Democratic nomination to take on Trump in the November election, poked fun at Trump’s notion of bringing the economy back from the grave by Easter.
“That would be a real resurrection if that could happen,” Biden said in an interview on MSNBC.
With the virus having claimed some 700 lives in the United States, and some hospitals becoming dangerously close to reaching capacity, the president has become increasingly at odds with New York Governor Andrew Cuomo, who is managing the state with the largest caseload thus far and has sharply criticized the federal government for its response.
In his daily press conference on Tuesday, the governor of Trump’s home state shot back at the president on the notion that the economy is more important than human lives.
“If you ask the American people to choose between public health and the economy, then it’s no contest. No American is going to say accelerate the economy at the cost of human life,” Cuomo said.
Cuomo said on Tuesday that the crisis in New York is escalating at a pace once unimaginable, and he warned it is a preview of what will happen soon in other parts of the country. The number of positive cases in the state, now around 25,000, triples every three days, and the state is running dangerously low on medical equipment and protective gear that can save lives and protect health care workers.
Cuomo said there is room for a more refined public health strategy that is also a good economic strategy.
“Don’t make us choose between a smart health strategy and a smart economic strategy. We can do both and we must do both,” he said.
Medical experts agreed. Malley said it is also probably not correct, as some have suggested, that a massive two-week national lockdown would end the epidemic. He said it would likely take longer than two weeks and would be impractical because so many essential services would need to continue.
“We have to figure out a way to … make this period of social distancing and of staying at home less damaging to society in general, but without, at the same time, making the virus come back or continue unimpeded,” he said.
The shuttered economy is particularly disastrous for low-income, working-class people who cannot work from home and often do not have paid sick days so can’t afford to stay home.
Lorena Garcia, an epidemiology professor at the UC Davis School of Medicine who studies health disparities, said social distancing can help slow the virus as quickly as possible so those people can return to work safely.
“COVID-19 doesn’t pick, regardless of social class or social standing, however it does impact working Americans in a much, much harder way,” she said.
Economists said an attempt to return to normalcy would unleash an economic devastation that would be much worse than the damage the virus has already caused.
Even with eased restrictions, the pandemic would continue to roil our daily economy. Some businesses would struggle to operate as their employees got sick en masse, with some dying. Other countries, still committed to the measures public health experts recommend, might bar Americans from entry, hampering international business and trade. Many Americans would remain afraid of the virulent virus, and those with financial means would likely continue to self-isolate. Many consumers would continue to avoid crowded restaurants, stores, and theaters.
“A warning to the president: Trying and failing to reopen the economy before economic activity is organically ready to resume could have dire economic consequences,” Michael R. Strain, the director of economic policy studies at the American Enterprise Institute, a leading conservative think tank, wrote in an opinion piece for Bloomberg Tuesday.
“We can’t just go back to normal tomorrow,” said Betsey Stevenson, an economist at the University of Michigan who advised former president Barack Obama.
Stevenson said the White House narrative is misleading by making people think that somehow they have to choose between a high standard of living or their health.
“There is no such thing as ‘the economy.’ We are a group of people who get together and trade in order to improve our own well-being and welfare,” she said.
Record fall in UK economy forecast – BBC News
The UK economy is forecast to fall an incredible amount in the current pandemic-afflicted quarter ending in June.
The forecast comes from an average projection of more than a dozen top economists contacted by the BBC.
While the same economists predict a similarly large positive rebound after that, this year, annual UK GDP is still anticipated to fall significantly.
While there is no precedent for shutdowns of large swathes of the economy, 14 of the top economists from the City and business have calculated how much economic activity is being lost.
The estimates range from JP Morgan’s calculation that about UK GDP in the April-June quarter will come in at -7.5% – a sharp contraction – to Capital Economics’ forecast of -24% – suggesting nearly a quarter of entire economic activity will be lost.
Half the forecasts seen by the BBC are between -13% and -15%. Quarterly figures normally move by fractions of a percent.
For reference, just a few weeks ago, before the pandemic hit the UK, the average forecast for this quarter was a fall of just 0.2%. The official Budget forecast a month ago, before the Coronavirus effects, pencilled in growth of 0.4%.
The BBC understands that analyses circulating in the Treasury are in line with the larger end of such declines. But the Office of Budget Responsibility (OBR) has not yet been asked to update projections from the time of the Budget a month ago.
One OBR member, Sir Charles Bean, has referred to it being “not implausible” that for as long as the lockdowns are in force, economic activity will be reduced “by somewhere between a quarter and a third”, and that a three-month lockdown “would knock something like 6-8 percentage points off annual GDP”.
Last week, the OECD group of leading economies said that the immediate hit to the UK economy would be worth 26% of the economy. But it did not put a timeframe on that.
The Bank of England is currently preparing new forecasts for its Monetary Policy Report, to be published early next month. Last month, Bank governor Andrew Bailey said he could not put a precise number on the likely GDP fall, as it depends on how Covid-19 evolves. But “every picture we look on at has a very sharp V on it”, he said.
Such movements have no precedent within a single quarter. The closest comparison would be the sharp fall in the economy during the Great Depression in the 1920s, although that occurred over three economic quarters. A prolonged fall such as seen a century ago is not what forecasters are predicting right now.
These sorts of numbers are anticipated across the developed world, as most nations pursue forms of shutdown to control the spread of the virus and protect health systems from being overwhelmed.
The forecast declines illustrate the difficult balancing act for the government in deciding when and how to lift lockdowns, now not expected until May at the earliest.
They also illustrate the fundamental economic policy challenge that the Treasury and Bank of England are trying to manage – to try to help ensure that there is a sharp rebound from these huge hits, avoiding prolonged damage to the economy.
Alberta's economy loses 117,000 jobs in March amid COVID-19 – Calgary Herald
Alberta’s economy lost 117,100 jobs in March, the worst recorded single-month change on record, according to Statistics Canada.
New numbers released by the federal agency on Thursday reflect the early impacts of the economic toll of COVID-19 on the province as well as the country as a whole, which lost over a million jobs during the same period.
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The numbers reflect labour market conditions during the week of March 15 to 21, by which time travel restrictions and public health measures directing Canadians to limit public interactions had already been put in place. However, public health measures and restrictions on non-essential businesses have intensified since then, meaning job numbers are likely going to look even worse when Statistics Canada releases its April numbers.
“We knew it was coming, but it’s still shocking to see the initial effects of the effort to contain the spread of COVID-19 on employment,” said ATB Financial on Thursday.
‘Dynamic’ physical distancing could help balance COVID-19 fight, economy in Ontario: study – Global News
Dialing physical distancing measures up and down could be a way of sustaining the long-term fight against COVID-19 while not crushing the economy, a new study from Ontario researchers suggests.
The scientists from the University of Toronto and the University of Guelph used mathematical modelling to predict the course of the disease in Ontario.
Their base modelling found 56 per cent of the province’s population would become infected with the novel coronavirus over the next two years.
At the peak of the crisis, 107,000 Ontarians would be hospitalized with 55,000 people in the ICU, the modelling numbers suggested, should nothing be done. The province currently has about 2,000 intensive care beds.
However, the research suggested so-called “dynamic” physical distancing could help keep the health-care system from becoming overwhelmed while allowing “periodic psychological and economic respite for populations.”
Physical distancing is an effective tool to curb the spread of the disease, Canada’s public health agencies have said.
The key, according to study lead author Ashleigh Tuite, is to “ride the wave” _ by pegging physical distancing measures to the number of intensive care beds in use, those restrictions can be loosened when ICU numbers drop, then tightened up again when the numbers near capacity.
“Instead of a sharp up-and-down epidemic curve, we have something that is stretched out and kind of goes up and down, up and down, and we basically modulate our responses based on where we are in that curve,” said Tuite, an assistant professor of epidemiology from U of T.
“When things start ramping up again, then we know that we need to enhance our social or physical distancing measures. And when things are on the downturn, then we can potentially return a little bit more to normal life.”
The paper was submitted in late March to the Canadian Medical Association Journal and published as a pre-print that has not yet been peer-reviewed.
Ontario government releases COVID-19 modelling data
Amy Greer, one of the study’s author’s, said this is another method to buy society time until a vaccine is available, which is likely more than a year away.
“In the absence of access to a safe and effective COVID-19 vaccine, we will need to work hard to slow down community transmission while also recognizing that we can’t reasonably maintain long-term and aggressive physical distancing until a vaccine becomes available,” said Greer.
Ben Bolker, a math and biology professor at McMaster University who was not involved in the research, called it a “sensible study.”
“The really hard part is figuring out how it’s all going to work at a government, logistic and bureaucratic level,” he said.
He said one potential method would be to change the laws around how many people can gather at once.
Both Tuite and Bolker said other tools will be arriving soon that could help. For one, they said, exhaustive testing would allow the province to drill down into hotspots and ensure isolation measures are placed on those people.
That also might allow some people to return to work.
“It sucks that we have to keep the economy shut for a bunch longer,” Bolker said. “But during that time we’re gathering information and figuring out how the hell we’re going to get out of this.”
Atif Kubursi, a retired professor of economics at McMaster University, said the study is a good starting point for how to fight the disease over the next year or two.
“This is one of the most important questions right now: how can you balance the risk of increased morbidity and death versus destroying the economy?” he said.
Kubursi points out that the study does not get into economic modelling and the effect of starting and stopping businesses – something he’d like to see future research take on.
“It sounds a little simplistic,” he said. “I don’t know if it’s easy to turn the economy on and off, but I guess there are some measures you can take to make businesses essential again.”
“We’d need to know the answer to the question: Is it worthwhile? Can we get people back to jobs in big numbers for short periods of time?” Kubursi said.
“If we can, maybe that is a way to keep the economy greased, keep it moving. It could be worthwhile.”
© 2020 The Canadian Press
Canada is expecting rise in Coronavirus deaths as job losses touch 1 million – International Business Times, Singapore Edition
BDC launches matching investment program for Canadian VC-backed companies affected by COVID-19 – BetaKit
Record fall in UK economy forecast – BBC News
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