Stop covid or save the economy? We can do both
From MIT Technology Review:
In late March... Trump warned against letting “the cure be worse than the problem itself” and talked of getting the country back to business by Easter, then just two weeks away. Casey Mulligan, a University of Chicago economist and former member of the president’s Council of Economic Advisers, warned that “an optimistic projection” for the cost of closing nonessential businesses until July was almost $10,000 per American household. He told the New York Times that shutting down economic activity to slow the virus would be more damaging than doing nothing at all.
Eventually the White House released models suggesting that letting the virus spread unchecked could kill as many as 2.2 million Americans, in line with the projections of other epidemiologists. Trump backed off his calls for an early reopening, extending guidelines on social distancing through the end of April. But his essential argument remained: that in the coronavirus pandemic, there is an agonizing trade-off between saving the economy and saving lives.
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Yet shutting down businesses is the only real choice, given that an unchecked pandemic would itself be hugely destructive to economic activity. If tens of millions of people become sick and millions die, the economy suffers, and not just because the workforce is being depleted. Widespread fear is bad for business: consumers won’t flock back to restaurants, book air travel, or spend on activities that might put them at risk of getting sick. In a recent survey of leading economists by Chicago’s Booth School, 88% believed that “a comprehensive policy response” will need to involve tolerating “a very large contraction in economic activity” to get the outbreak under control. Some 80% thought that “abandoning severe lockdowns” too early will lead to even greater economic damage.
Meanwhile, any measures to slow deaths from the virus will have huge downstream economic benefits. Michael Greenstone, an economist at the University of Chicago, finds that even moderate social distancing will save 1.7 million lives between March 1 and October 1, according to disease-spread models done at Imperial College London. Avoiding those deaths translates into a benefit of around $8 trillion to the economy, or about one-third of the US GDP, he estimates, on the basis of a widely accepted economic measure, the “value of a statistical life.” And if the outbreak is less severe than predicted by the Imperial College work, Greenstone predicts, social distancing could still save some $3.6 trillion.
More: https://www.technologyreview.com/2020/04/08/998785/stop-covid-or-save-the-economy-we-can-do-both/#Echobox=1586385642?utm_source=pocket-newtab
Bolding is mine. And here's a money quote from the article: "The best way to limit the economic damage will be to save as many lives as possible. "
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