At this moment, the United States and the world are accumulating numbers of people contracting the COVID-19 coronavirus and numbers of people losing their jobs and businesses.
Both have an ominous multiplier effect.
The question faced by our elected officials, starting with the President and the nation’s fifty governors, is how much longer can they shut down the economy to fight this insidious virus, and is it prudent to continue this way?
As of midday Tuesday there were more than 46,500 Americans who tested positive for the COVID-19 coronavirus, and nearly 600 dead; this death toll having tripled in just five days. The global figures are significantly higher, with a greater proportion of deaths to those diagnosed, as compared to the U.S.
Importantly, in the U.S., of those diagnosed with COVID-19, the percentage of deaths continues to dwindle. While both figures are expected to rise, the death rate is now below 1.3 percent and heading to more familiar influenza territory of less than one-fifth of one percent.
On average, 8 percent of Americans annually contract the flu. Depending on the season, this perennial number ranges between 3 and 11 percent of the population, according to the U.S. Centers for Disease Control. In 2017, 55,672 Americans died from the flu or pneumonia, the eighth biggest killer that year. This staggering figure yet amounts to a death rate between 0.1 and 0.2 percent of those who contract the illness, which is less than two hundredths of a percent (<0.02%) of Americans overall.
The death rate from COVID-19 may, in fact, be closer to the influenza rate than initially realized since millions of Americans have not been tested, yet may already have suffered mild versions of the coronavirus.
The nearly 56,000 Americans who died from flu and pneumonia in 2017 was higher than a typical year and nearly the equivalent of the number of Americans who died in the Vietnam War over a dozen-year period. Tragically, the number of annual flu deaths in America is in the five figures.
The closing of businesses and restrictions put on Americans by several state governors will have the effect of slowing the spread of COVID-19. It ultimately will not stop its spread, since this virus is more contagious than the typical flu virus. But slowing its spread is vitally important to buy time for the weather to warm up and to “flatten the curve” of cases so as to ease the impact on the health care system over a short period.
Meanwhile, the closure of businesses and massive, growing unemployment also will take its toll if allowed to continue much longer.
For every restaurant, hotel or other business that closes, workers are laid off, mortgages and other debts won’t get paid, and bankruptcies will multiply. The longer we have governments imposing restrictions on congregating and traveling, the more severe will be this economic downturn. If borrowers default on debts en masse, the commercial mortgage market will collapse absent extraordinary intervention by the government.
At this writing, Congress is deadlocked on legislation to cope with the downturn in the economy, which include cash payments to individuals and families, and loan programs and bailouts to businesses, among other provisions.
Some of the disagreement relates to congressional Democratic leaders demanding a slew of non-germane proposals to this emergency bill, including tax credits for wind and solar projects, and increased fuel emission standards for the airlines. Regardless of how one views these issues—which are highly dubious on their own—I doubt a small business owner shutting her doors, a laid off worker, or a COVID-19 victim on a ventilator is hoping that airplanes become more carbon efficient and additional wind turbines sprout.
Assuming imminent congressional agreement, how soon with the cash flow, how long can it last, and will it be enough of a backstop to this economic downward spiral?
In a matter of days, federal and state governments may have to rethink their restrictions on activities of Americans in order to stave off what will be an economic depression. At a minimum, restrictions will need to be more targeted to protect more vulnerable populations like the elderly, and the government must continue to provide needed supplies to front-line workers and equipment and capacity to health care facilities.
If the COVID-19 coronavirus proves to be little more dangerous than typical annual influenza, the ongoing fight against it should not turn into an economic calamity which has not been seen in this country in 80 years and will result in greater tragedy.