Yale economists warn there's only one way the US truly 'restore' its battered economy
Many far-right allies of President Donald Trump, from Sen. John Kennedy of Louisiana to Texas Lt. Gov. Dan Patrick to radio host Glenn Beck, have railed against Democratic stay-at-home orders and argued that too much social distancing is strangling the U.S. economy. But economists Steven Berry and Zack Cooper, in a Politico op-ed published on July 10, argue that the only way to “restore” the U.S. economy is to seriously slow down the spread of coronavirus — and doing so is going to require aggressively funding anti-coronavirus measures.
“Unfortunately, Congress and the (Trump) Administration seem poised to return to a tired playbook which isn’t working: ramping up government spending as if we are stuck in a pure financial crisis,” explain Berry and Cooper, both of whom teach economics at Yale University. “Financial aid, while vitally important for reducing the economic pain caused by COVID-19, will not hasten the end of the pandemic.”
Congress, according to Berry and Cooper, needs to fund “solutions that would shorten or mitigate the virus itself” — for example, “measures like increasing the supply of PPE, expanding testing, developing treatments, standing up contact tracing, or developing a vaccine.”
“As Congress considers next steps,” the Yale economists write, “it’s imperative to shift priorities and direct more funding and effort toward actually ending the pandemic.”
Blaming social distancing for the United States’ economic problems, they stress, is wrong-headed because the thing that is imperiling the U.S. economy is the pandemic itself.
“It is vital that elected officials realize that stay-at-home orders, social distancing, masks and school closures are not the primary cause of our economic dislocation,” Berry and Cooper assert. “Americans decreased their economic activity before those orders went into effect and will restrict their activity as long as the threat of catching COVID-19 persists. No matter how much cheerleading is done, a phased reopening of the economy is not going to lead to anything approximating full economic activity until we credibly address the pandemic…. To fully address a crisis, you need to address the cause of the crisis, not just its economic fallout.”
Berry and Cooper observe that economist Michael Kremer has “proposed” a “$70 billion dollar vaccine effort” — and while a COVID-19 vaccine is being developed, they write, ways to fight the spread of COVID-19 range from “widespread testing” to “mass contact tracing” to “the production of enormous quantities of masks and personal protective equipment.” The economists note that while Americans are hoping for “an effective vaccine in 12 months” but float a disturbing possibility: “what if it takes three years?”
The economists warn, “At present, the biggest risk we face as a nation is a second deadly wave of the pandemic like the one that occurred during the 1918 flu…. We could leave ourselves with no backup plan if a truly effective vaccine never arrives. Or we could choose a bold and diversified approach that funds a range of proposals to address COVID and credibly signals to businesses and the public that we, as a nation, are going to take out the approaching asteroid.”