The damage from the shutdown of the U.S. economy will be severe. Having ‘flattened the curve’, rapidly expanded hospital capacity, and kicked critical production lines into high gear, it is time open up the economy before the second order impacts cause more health damage and death from the shutdown than from the coronavirus.
(Cross-post from my other blog, Nonprofit Update.)
4/10/20 – originally posted on Medium but was pulled; do a bit of reading and then make your own assessment why the site didn’t want the article to remain visible to the public – Eight Reasons to End the Lockdowns Now – article was written by five medical doctors and one Doctor of Nursing Practice.
The eight reasons:
- We have already flattened the curve
- Economic collapse and unemployment are destroying families
- We have not overburdened the health care system
- Suicide may kill almost as many people as COVID-19 this year
- The mortality was overestimated
- Children are at almost no risk from this disease.
- PPE was limited but is now available
- Authorities should show clear evidence regarding the benefits of indefinite lockdown
Check out the article, which you have to find on one of the web’s archive site. Above link is to an archived copy. There you can find an explanation of each of the above points.
Economic damage
4/9/20 – CNBC – US Weekly Jobless Claims Jump By 6.6 Million And We’ve Now Lost 10% Of Workforce In Three Weeks – Another Surge In New Unemployment Claims Announced Today. Here Is A Recap:
| 3/21/20 | 3.3 |
| 3/28/20 | 6.9 |
| 4/4/2020 – released 4/9/20 | 6.6 |
| —- | |
| 3 week total | 16.8 |
Let’s use 3/12/20 as the start point for the shutdown of the economy. That is when California issued what I think was the first state-wide stay-in-place order. Schools were closed before that. The voluntary pull back by the private sector started before then and it took a while for most of the economy to get closed by all the governors. Let’s use 3/12 as an approximate starting date for the shutdown.
That gives us about 24 days from 3/12 to the 4/4 tally above. Counting business days only, that is 17 days.
The tally above is probably understated since the state unemployment systems aren’t designed for that volume of people. Also, there are lots of folks without work who don’t qualify for unemployment. Finally, the tally doesn’t include people whose pay has been cut by 10% or 25%, which is happening in lots of law and accounting firms.
So, the shutdown is costing about a million jobs each business day. Make that over a million a day including those jobs not included in the tally.
That is a steep cost that will have ongoing economic costs (are finance teams of colleges, cruise lines, pro sports teams, and entertainment venues paying attention?). There will be rapidly growing costs in terms of adverse health outcomes.
4/13/20 – Washington Examiner – Pandemic likely to exceed Great Recession in number of bankruptcies – Economists from a leftist think tank and a conservative think tank both guess that the number of bankruptcies from the current shutdown of the economy will exceed the number from the Great Recession.
For background, here is the number of bankruptcies per year. I pulled the count of total cases filed in federal bankruptcy court from the US Courts website.
| 2006 | 0.62 |
| 2007 | 0.85 |
| 2008 | 1.10 |
| 2009 | 1.40 |
| 2010 | 1.60 |
| 2011 | 1.47 |
| 2012 | 1.21 |
| 2013 | 1.11 |
| 2014 | 0.94 |
| 2015 | 0.84 |
| 2016 | 0.79 |
| 2017 | 0.79 |
| 2018 | 0.77 |
| 2019 | 0.77 |
| 2020 | 0.77 |
The recession officially ended in June 2009. Bankruptcies accelerated in 2008 and then peaked in 2010. Notice it was 2014 before the tally dropped below a million and 2016 before the count settled in at a typical level.
Emotional damage
4/12/20 – Wall Street Journal – The Struggle to Cope With Depression Amid Coronavirus – Article says 22% of Americans struggle with anxiety during a typical year and 9.4% have some sort of mood disorder.
How do I put this…There are one or more persons in my sphere of friends and acquaintances for whom anxiety is a real issue and one or more people I know for whom mood disorders (such as depression).
A survey by the American Psychiatric Association suggests over one-third of Americans are sensing the pandemic is have what the survey categorizes as a “serious impact” on mental health.
Article has a number of suggestions on how to better cope with the isolation and shredding of normal routines.
Those emotional struggles are worsened by the isolation from stay-at-home orders.
4/9/20 – Wall Street Journal – Coronavirus Pandemic Takes Toll On Mental Health – Article describes how the forced isolation and disruptions are starting to cause distress in terms of mental health. There will be a severe Ripple effect from the stay-at-home orders and shutting down the economy.
Keep this in mind for your clients, your staff, and your family. Keep this in mind for yourself as well.
The deadly serious issue
So the harsh question:
- will there be more deaths with a continued economic shutdown or without?