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2020-04-11

Can the Economy Become Normal Again?

The COVID-19 outbreak is a global phenomenon. It's even potentially in outer space with the launch of a Soyuz mission to the International Space Station last Thursday. That ferry delivered two Russians and an American to the ISS from countries still struggling with the virus. So, there is no place where humans reside that is safe.

Our president is considering re-opening shuttered businesses because bankers and corporate leaders are lobbying for a return to normal. Perhaps by the end of April. That is understandable since my state now officially has 500k unemployed people, 10% of the workforce. The actual percentage is certainly higher since many undocumented and other workers do not or cannot apply for such benefits. Nationally, more than 16 million claims have been filed in three weeks. Again, your mileage may vary since not all workers are allowed to file claims.

Clearly, the people who do the work of America are suffering. For all who cannot or should not go to their jobs, they have to fall back on personal savings or the unemployment system. At this moment, state unemployment websites are crashing daily because they are overwhelmed by the number of hits as so many people need to file a claim.

Well, help is on the way–sort of. The federal government is going to pay individuals who make less than $75,000 per year $1,200 in the next few weeks. You either have to be in the IRS system or get registered for payment. (What could go wrong there?) That's one payment that is a bit above the official poverty rate (which has its own issues of being too low to sustain a healthy life). One payment. One.

Clearly, even the Trump Administration believes that the stimulus payment will not be enough to help businesses and their employees survive. Hence the talk of reopening things earlier than public health experts say is prudent. We have a collision of interests between the needs of health and the demands of the economy. People need money, but returning to work puts more people at risk of illness and death. And more people will die if we return to work without qualifications. How can we do it?

First, stop thinking that it's a giant on/off switch. It's like a panel of switches that do more than turn things on or off. We need to calibrate between issues of public and economic health and for a very long time. Ridding the world of COVID-19 will take, best case, 18-24 months. That's because we won't have a vaccine sooner than that and it will have to be universally administered to be globally effective. It took 30 years to eliminate smallpox from the earth. No less a logistical and managerial effort will be required of COVID-19.

This will be different, you say. Everyone is at risk rather than just people in poor and remote countries. Perhaps, but we have an infinite capability to rationalize risk. Once America has achieved vaccine-induced immunity, will we continue to fight the virus as strongly in the rest of the world? But I digress.

What about the economy? Can we turn it back on? We might be able to but only carefully. It involves understanding who has and who has had the disease. That's tricky since we don't know if surviving the disease confers lasting immunity in every case. Even if it does, we then need to test everyone everywhere and many of those more than once. Repeated testing is needed because if you don't show the antibodies that indicate immunity does not mean you are not sick or infectious. The body takes a few days to produce those, so everyone without them is still a possible source of infection. All of this assumes that the detection of antibodies is a solid indication of immunity. And that immunity will last.

So, without massive testing of a test that does not exist for an immunity that is unproved, we should not turn the massive Everything-ON switch for the economy. We need a series of stimulus bills to keep the economy on life support while we work on testing, treatment, and a vaccine.

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