My colleagues and I, a team of economists, social scientists, lawyers and philosophers consulting closely with public health experts, have come to this conclusion after looking in depth at possible societal responses to the pandemic.
Our analysis found only two real options that combine a public health strategy and an economic strategy. In a white paper published this week, we call those options “Freeze in Place” and “Mobilize and Transition.” A third strategy, of letting the disease run its course nearly unimpeded in order to return swiftly to routine business activity, is also theoretically on the table. We call this approach “Surrender.”
The first paradigm involves repeated orders to “shelter in place” — a rotation of roughly two months under quarantine, one month out, for 12 to 18 months. To support this, the economy is “frozen,” much as Denmark is doing now: The government uses public funds both to keep people alive and housed and to keep businesses from closing, so that when the pandemic subsides, the economy can just pick up where it left off. The proposed $2.2 trillion U.S. stimulus package is a step in this direction, in effect a kind of down payment that will carry our economy through two to three months. For a longer fight on this sort of Freeze model, it would have to be re-upped quarterly, leading to a final tally of somewhere between $10 trillion and $15 trillion.
The second paradigm, “Mobilize and Transition,” treats the potential collapse of our health infrastructure as a major national security threat, so the policy response is to marshal all the resources of wartime. With the coronavirus as the enemy, this involves a single, up-front period of aggressive social distancing of approximately three months, to reduce transmission of the disease; simultaneously, the government acts just as aggressively to build an infrastructure for fighting and surviving the pandemic — investing in production of testing capacity and test administration, personal protective equipment, and tools for case identification and contact tracing.
In other words, we mobilize to transition to a society with pandemic resilience that permits maximal mobility for as large a portion of the population as possible even when the pandemic is ongoing. This, we believe, is the best option.
The most important targets of this aggressive investment would be (1) the technology for contact tracing, (2) testing capacity of millions per day, (3) proof that at least temporary immunity is possible and provable, and (4) deploying individuals with proven immunity as care workers for the most vulnerable populations. The goal would be universal coverage with these resources by the end of the three-month quarantine.
Testing is key, but the test kits should not require more than an investment of a few billion dollars, about 1 percent of the proposed stimulus. The harder part would be the rapid activation of organizational resources to build and deploy a network or national service corps of capable test administrators. Can this be done? At what cost? Our analysis in an accompanying white paper, “Mobilizing the Political Economy for COVID-19” is that from a purely economic perspective, the answer is yes. It requires overcoming supply chain and other logistical issues but would ultimately cost only $2 trillion to $3 trillion — less in short than Freeze’s likely total and the same amount as the down payment the Senate voted on on Wednesday. It would have been better to start with a package like this, rather than a conventional stimulus. Maybe some of the stimulus can be organized in this fashion, but we would presumably also need an additional package.
For perspective, over the course of World War II, U.S. investment in the war ramped up to more than 37 percent of gross domestic product in 1945. In 2019, U.S. GDP was just under $22 trillion. So the question is not whether a full mobilization is possible but whether there is the political will to do it.
This brings us to the approach we call “Surrender” — namely, that we should just let the disease run its course, accepting the death toll, to reboot the economy sooner rather than later.
Even on narrowly economic grounds, that’s the wrong way to go. Credible estimates say that in the absence of mitigation strategies, 60 percent of the population would be infected and 2 million Americans would die. The dollar value conventionally assigned to the loss of a human life in the United States by economists and government agencies is $5 million to $10 million. Using a conventional cost-benefit framework, this policy path would cost our economy around $10 trillion to $20 trillion — more than either Freeze or Mobilization.
But these are not the right grounds for making this decision. In our constitutional democracy, we channel our individual powers into the institutions of government for the express purpose of securing our rights and to bring about our collective safety and happiness. Allowing 2 million fellow Americans to die is not only morally unconscionable but would also mean that our political institutions had failed at their most fundamental job.
Consequently, my colleagues and I urge our fellow citizens to join us as participants in an urgent moment of collective planning. We need to communicate to decision-makers at all levels of our federal system the need to pursue a policy not of Freeze, and not of Surrender, but of Mobilization. We need to be ready to reach even deeper into our collective purses and the national treasury.