‘All bets are off’ if US economy unable to reopen by summer
As unemployment numbers continue to skyrocket and businesses struggle, economists remain concerned over just how long the ongoing shutdown will continue.
“If this does carry on, [and] if we are sheltered in place through the summer, then essentially all bets are off,” Windermere Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross.
Gardner predicts that the second quarter could see an “extraordinary” economic decline of up to 32%.
“It really is a massive drop,” he noted, pointing out that projections for quarters three and four depend largely on when the country can be reopened again.
That said, economists are uncertain when social distancing measures can safely be relaxed.
“Economists have to follow what the epidemiologists are saying,” said Gardner.
The University of Washington’s predictive model is largely viewed as the “best case scenario” for case numbers and possible deaths, and it assumes that extreme social distancing measures are maintained all the way through May. The so-called “worst case” scenario comes from Imperial College, which calls for a full 18-month timeline from the start of the outbreak, to allow time for a vaccine to be produced.
But even that data provides little in the way of hard numbers for when it might be safe for businesses to start opening back up again.
For the economy to successfully reopen without the virus rebounding, it would take a level of large-scale testing and contact tracing the U.S. has yet to fully implement. That’s something that concerns numerous other economists and health officials.
“There’s no way that you could set a time limit on when you could open up the economy [without more testing],” University of Chicago economist Simon Mongey told The New York Times.
“Until [we have] widespread testing and massive scale-up of the public health system to ensure case/contact tracing, big time risk remains,” Seattle-King County Public Health’s Dr. Jeff Duchin echoed on Monday.
Reopening the economy before the virus has been quelled and proper testing has been put in place could only prove to exacerbate the outbreak, as well as its economic impact. As Gardner notes, “the country has to restart,” but that will be difficult to achieve without precautions the U.S. currently doesn’t have in place.
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