Choose

2 hard choices on the coronavirus path — Trump signals shift to Path B

Snacks / Monday, March 23, 2020
"_Well... both these paths look pretty terrifying._"
"_Well... both these paths look pretty terrifying._"

Two roads diverged in a yellow wood... and both are less travelled by. Robert Frost had an easier choice. When the "15 Days to Slow the Spread" end on March 31, the White House will face 2 options for what to recommend next in response to the Coronavirus:

  • A) Aggressive distancing: Order everyone to stay at home, keep almost all businesses closed indefinitely, and have those who can WFH do it. Great way to contain the disease, but with devastating economic consequences: Potentially 30% unemployment and Goldman Sachs thinks 2.25M became unemployed just last week.
  • B) Targeted/Partial distancing: Relax CDC guidelines to gradually let biz reopen and the young/healthy return to work. Only keep the most vulnerable — the elderly and those with pre-existing conditions — at home. This could limit the economic damage, but with potentially devastating health consequences: If miscalculated, this could increase the death toll to millions.

We've never been faced with a decision like this.... Both President Trump and Treasury Secretary Mnuchin have signaled a shift in which path to choose, only days after promoting the 15-day distancing plan. Trump tweeted Monday "we cannot let the cure be worse than the problem itself." He doesn't want to save everyone if it means utter destruction of the economy.

This choice is painful — and economists love that... It isn't strictly between economic damage or health damage, because the 2 overlap in some scenearios: Inability to support families could increase suicide rates, a leading cause of death in the US — but relaxing social distancing guidelines might overwhelm the healthcare system, leading to more deaths and economic damage in the long run.

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