Washington, D.C. — As policymakers grapple with how to mitigate the impact of a potential coronavirus pandemic, a new analysis from the Center for American Progress examines the effect the virus could have on the economy and the steps that government officials can take to strengthen the economy in the wake of the potential crisis.
While the exact effect of the coronavirus on the U.S. economy is unknown and unknowable, it is clear that the virus poses tremendous risks, including supply chain disruptions, a consumer slowdown, and economic uncertainty.
In “The Economic Impact of Coronavirus in the U.S. and Possible Economic Policy Responses,” Andres Vinelli, Christian Weller, and Divya Vijay propose five principles that Congress and the Trump administration can use to reduce the impact of the coronavvirus on the U.S. economy:
1) First, do no harm. The Trump administration has to find one voice and stop creating more confusion. The administration should also stop attacking the very programs the country needs to withstand the crisis including paid leave, public health insurance, food stamps and other social programs.
2) Put more, not fewer, resources in public health efforts. Medical services should be highly subsidized and be delivered free of charge (or close to free of charge) and at a maximum convenience to users. The administration should consider immediate efforts to subsidize detection, treatment, and eventually immunization.
3) Assure businesses that things will be fine if the virus hits their sector, and remediate harm when necessary. The government should consult with major retailers and their suppliers to address major supply chain concerns, especially in critical sectors such as the food and pharmaceutical sectors, and provide financial support to avoid disruptions, especially for small businesses.
4) Calm financial markets. The government and regulators should monitor financial markets closely and prepare for possible market stress and credit events and intervene where it is sensible to do so.
5) Ease the risks for households and vulnerable populations. Programs like paid sick leave and expanded Medicaid will be critical to keep the U.S. population healthy and able to participate in the larger economy.
“It is imperative for policymakers to keep a cool head and take steps to ensure that the disruptions to workers and individual businesses are minimized,” said Andres Vinelli co-author of the analysis and vice president of Economic Policy at the Center for American Progress. “So far President Donald Trump’s chaotic response to the virus has only served to exacerbate the public health and economic crisis we are facing. Still, by following the principles my co-authors and I laid out, there is time to mitigate the potentially devastating impact of the coronavirus.”
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