The Coronavirus Versus The Economy

Well, the coronavirus is in full swing and most governments short term reaction has been to shutdown large parts of the economy to stop the virus spreading and therefore the possibility of serious coronavirus cases placing unbearable short term demands on their health services.

The humanitarian response and immediate pressure on governments is to try to save as many of their citizens lives as possible. However, the longer the pandemic continues the more data we will have and the more necessary will be a debate about saving lives in the short term versus saving them in the medium to longer term by getting economies back up and functioning to some degree. Even Donald Trump has spotted that the treatment should not be worse than the disease. To be realistic we are going to have to change strategy and realize that we need think about reopening parts of the economy that have been shut down because if we keep them shut down for an extended period of time too many will never re-open again. We know that the longer the blanket shutdown goes on the more the loss of economic output, the more the strain on the public finances and the greater damage to jobs. Make no mistake a global depression will cost many more lives than the coronavirus and many of those lives will be in the younger and middle aged parts of the population.

I believe that after a month or two more of this crisis most governments will have no choice but to consider reopening parts of their economies in a risk-controlled manner. People that have had exposure to the virus can resume work, many of the youngsters are far less at risk and should be allowed to return and many others should be able to return to work so long as precautions concerning social distancing and other safety measures are put into place. Those that can work effectively from home should be allowed to do so. The current blanket shutdown response is not sustainable and is far too damaging economically and not in the medium or longer term good for the health of societies. The more data we obtain, the more testing of people we can do and the more isolating of the older and most vulnerable groups to the infection the better will be the results we get from the current crisis.

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.