To reboot the economy, the U.S. has to control the virus first

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Experts testified before Congress' Joint Economic Committee Tuesday about the coronavirus response's effect on the U.S. economy.

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WASHINGTON (WDVM) — On Tuesday the Johns Hopkins Coronavirus Resource Center reported more than 200,000 Americans have died from the coronavirus. Americans makeup 4 percent of the world’s population, but have suffered 21 percent of worldwide coronavirus deaths. 

The coronavirus has devastated the American economy, and Virginia Congressman Don Beyer says it can only recover once the virus is contained. Beyer is the vice-chairman of Congress’ Joint Economic Committee, whose members discussed the economic impacts of the country’s failure to control the virus during a hearing on Tuesday.  

Beyer reported the U.S. has nearly 12 million fewer jobs than it had in February and 3.4 percent of the country is permanently unemployed. The congressman blames President Donald Trump’s downplaying of the virus earlier this year. “The president should have used the early weeks of the crisis to educate the public…it took more than seven weeks after the first confirmed case in the United States for him to declare a national emergency,” he said.

Dr. Ashish K. Jha, Dean of the Brown University School of Public Health, said the U.S. failed to put critical public health measures in place to control the spread during those early months. Jha testified that the “nation was blind to the spread of the disease,” and didn’t employ testing, tracing, and isolation early enough. It also should have encouraged social distancing and face coverings (the CDC formally encouraged masks in early April, and yet 17 states still don’t have a mask-wearing order). 

The president’s reopening of the economy had short term benefits; between May and August, Beyer says the country regained half of the jobs it lost and the unemployment rate dropped from 15 percent to 8.4 percent. But experts caution against continued stimulus funding and agree that containing the virus should take priority. 

“Large scale stimulus can have a tendency to exacerbate an already whopping national debt and can have a tendency to crowd out national investment,” said Joint Economic Committee Chair Mike Lee (R-Ut). “The enhanced unemployment benefits included in the CARES Act provided a disincentive for those who were unemployed to return to work, thus inhibiting economic recovery.”

Jeffrey A. Singer, the senior fellow at the Cato Institute, says the federal government has spent $4 trillion in coronavirus aid. He does not believe temporary programs are sustainable, especially without an end to the pandemic insight; stimulus spending adds to the national debt, which falls on American taxpayers to payout. 

Senator Lee says the coronavirus response shouldn’t be centralized; instead, states and localities should be encouraged to make decisions. Senior Policy Analyst Adam Michel of the Center for the Federal Budget agrees and said the FDA was delayed in approving coronavirus testing. 

Austan D. Goolsbee, a professor at the University of Chicago’s Booth School of Business, testified that the public’s fear “killed the economy.” The majority of Americans are considered at-risk of contracting the coronavirus (Goolsbee cited obesity, previous heart conditions, and being over the age of 65). 

“The main thing that drove the decline was people were afraid of catching the disease and so they stayed home,” he said. “You need only look at the airline industry where there are no laws forbidding people from flying but the demand for air travel plunged anyway because people are themselves nervous.”

But Goolsbee says it’s “not too late” to respond in ways other “rich” countries have successfully handled the virus. Dr. Jha looks to South Korea’s and Japan’s response, to name a few. 

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