By Diane Swonk, Grant Thornton
COVID-19 is first and foremost a health crisis. It is a pandemic that is spreading rapidly. The only way to stem the loss in life and avert a larger loss to the economy is to literally shut down economies around the world, including the U.S. Dr. Anthony Fauci of the National Institutes of Health (NIH) estimates that we could suffer between 100,000 and 240,000 fatalities under “best case” scenarios over the next several months. That is several times the souls we lost to the Vietnam War and the wars in Iraq and Afghanistan, which spanned decades.
The cost-benefit analysis is unambiguous. Recent M.I.T. and Federal Reserve research on the 1918 Flu Pandemic shows that non-pharmaceutical interventions (NPI) – social distancing – reduced the number of deaths for cities that acted aggressively and strengthened their recoveries relative to cities that did not engage in shutting down public gatherings.
Moreover, we are learning from China on a real-time basis how complex the logistics of ramping up can be without a vaccine. Workers need to be quarantined and protocols for cleaning and protective gear need to be followed. This is at the same time that consumers and workers remain reluctant to use public transportation or enter public spaces for fear of another wave of infections. Shutdowns elsewhere are adding insult to injury to manufacturers watching demand for their products evaporate.