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A senior adviser to President-elect Joe Biden has raised the possibility of shutting down the U.S. economy for several weeks to help contain the coronavirus.
Dr. Michael Osterholm, infectious disease specialist and member of the COVID-19 advisory team recently appointed by Mr. Biden, spoke to Yahoo! Finances on Wednesday on measures the United States could take to curb the spread of the virus. According to him, one option is worth considering: imposing a four to six week shutdown of the country while providing workers, small business owners and local governments with hundreds of billions of dollars in financial aid to help them, he noted.
“We have a large reserve of money that we could borrow, at historically low interest rates from the federal government. We could pay a lump sum right now covering all lost wages for individual workers, losses for small and medium-sized businesses, for cities, states, county governments, ”Osterholm said in interview.
He continued, “If we did that we could lock in for four to six weeks, and if we did we could reduce the numbers, like they did in Asia, like they did in New Zealand. and Australia. “
Since March, Congress has provided $ 659 billion in emergency loans to small businesses and $ 268 billion in improved unemployment benefits for workers. Aid for small businesses was quickly depleted and unemployment aid is expected to run out in December.
Members of Congress from both parties have expressed openness to yet another round of stimulus spending to support the economic recovery, but the two sides remain far apart on how much they are willing to spend.
Dr Osterholm is one of many public health experts to sound the alarm as the virus invades the United States. New daily cases of COVID-19 continue to break records and 45 U.S. states have an increasing number of cases. 144,000 people tested positive for the virus on Wednesday and 3,300 were hospitalized, according to the COVID monitoring project.
In response, a number of states and cities have reimposed lockdowns. Minnesota has limited in-person gatherings and implemented a curfew for bars and restaurants. New York has imposed 10 p.m. curfews in gyms, bars and restaurants. Utah, where the rate of positive tests is nearly 20%, declared a state of emergency this week and required all residents to wear masks.
Dr Osterholm told Yahoo! Finance that the country was entering a period it called “COVID hell”.
“We have health systems that are already overwhelmed, right now, and we are talking about potentially doubling the number of cases” before inauguration day, he said.
“There is no doubt that our hospitals are about to be overrun,” he told CBS News earlier this week. “Don’t be surprised at all when we hit 200,000 cases a day.”
Drugmakers are reporting progress in developing a vaccine against the coronavirus. Pfizer said Monday that human trials suggest its vaccine is 90% effective in preventing COVID-19 in people who are not known to have had the disease in the past.
AstraZeneca has said it could deliver a vaccine as early as January, but is still in the process of establishing its safety and effectiveness. Moderna, another prominent candidate to develop a vaccine, said it would not be ready for widespread use until next spring.
“We could really watch ourselves looking at vaccine availability in the first and second quarters of next year, and bring the economy back long before that,” Dr Osterholm told Yahoo! Finance.
With or without lockdown, the spread of the virus continues to threaten the fragile economic recovery. It “looks like this will end up being a W-shaped recovery,” Torsten Slok, chief economist at Apollo Global Management, said in a research note.
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