The profound economic cost of the battle against the coronavirus is becoming clearer in Minnesota and across the U.S., and forcing policymakers toward an uncomfortable set of questions.
Trump, Walz, other leaders face fundamental choices between health and wealth
As economic toll rises, hard choices are being rethought by officials at every level.
March 24, 2020 at 10:11AM
Is there a point at which flattening the curve of viral infection causes more damage than it prevents, and where is that point? What cost to the U.S. and global economies are Americans willing to accept to save the lives of those most vulnerable to the pandemic?
Even if the government were to encourage everyone back to normal life sooner than public health officials and epidemiologists advise, will people feel safe enough to do so?
"WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF," President Donald Trump tweeted late Sunday night, triggering a debate Monday that fell along partisan lines.
Governors, including Minnesota's Tim Walz, have imposed social distancing rules that have shut down public life in hopes of slowing the spread of the virus and preventing the health care system from being overwhelmed. But information about the virus is imperfect.
As of Monday, there were 374,921 confirmed cases of COVID-19 worldwide. So far 16,411 people had died from the virus, a 4.4% death rate. But likely hundreds of thousands have contracted the virus without being tested or suffering symptoms of COVID-19, so the real mortality rate is unclear.
Meanwhile, financial markets fell another 3.5% Monday, and are down more than a third since a month ago. Wall Street banks are projecting the U.S. economy will contract dramatically in the April-June quarter.
James Bullard, president of the Federal Reserve Bank of St. Louis, told Bloomberg that unemployment could soar to 30%, which would be worse than 1933, the worst year of the Great Depression.
In Minnesota, 123,624 people have applied for unemployment benefits since last Monday, a number that represents more than 4% of the workforce and likely undercounts the jump in joblessness over the past week.
Some trade-offs between health and the larger economy have already been made in the U.S.
Grocery workers are risking their health to work checkout lines so people can buy food. Child care providers are staying open, despite the risk to employees and the potential spread of the virus through classrooms of children, to give parents the chance to continue working.
The implications of a U.S. economic crash go well beyond the U.S. and are "not a small thing," said Sridhar Venkatapuram, a professor of global health and philosophy at King's College in London. He and others, such as Federal Reserve Bank of Minneapolis President Neel Kashkari, point out that extended joblessness has a serious human cost.
In the United Kingdom, leaders calculated that shutting down society was not worth the economic cost, and pursued what Venkatapuram called a "brutal utilitarian ethical calculation" that would have allowed the virus to quickly work its way through the country and kill the approximately 1% of those infected who were likely to die from it.
"There was a really severe backlash because that 1% is actually 200,000 people," Venkatapuram said. "Then they started backtracking."
In the U.S., the response to the virus has been patchwork — it varies by state, and the message from the White House has swung from downplaying the severity of the virus early on to encouraging broad social distancing measures to emphasizing the need to get the economy back up and running.
At this point, Venkatapuram said, many people would not return to normal routines even if encouraged to do so.
Ultimately, the policy decisions fall not to epidemiologists or economists, Venkatapuram said, but to governors, prime ministers and presidents whose job is to look across disciplines and make hard choices.
"One of the most difficult things that a leader can do, even in the best of circumstances, is make decisions about lives. Which lives will survive, and which lives won't, is the most stark trade-off you will make," Venkatapuram said. "It's not something that you can do over time. It's now. Choose now."
The governor said it may be 2027 or 2028 by the time the market catches up to demand.
