18/07/2020
When states began to order businesses to close and residents to stay home as the coronavirus outbreak spread, economists likened the policy to a medically induced coma: shutting down all but the most vital functions to focus on the underlying affliction.
Now the patient is awake, but the malady remains.
A surge in coronavirus cases has forced several states to reimpose restrictions and dashed hopes of a rapid economic rebound. But a widespread return to the shutdown policies that dominated in March and April seems unlikely.
Instead, the economy looks likely to remain in a sort of limbo, neither fully open nor fully shut, for months or even years.
Lost jobs “are going to come back very slowly — it’s going to be months and months of hard work,” said Betsey Stevenson, a University of Michigan economist who was on President Barack Obama’s Council of Economic Advisers. “The question is, do we have 30 million people who are going to go through that process, or do we have five million? We don’t have the answer to that yet, but every month it goes on, that number grows larger.”
Economists have urged Congress to answer some of those questions — not just now, but for the future. Benefits could be linked to the unemployment rate, for example, so that workers would not have to worry about losing benefits before the job market improved. Similar steps, linked to different metrics, could make businesses and state and local governments confident that government support won’t evaporate without warning.
Brinkmanship, on the other hand, could have economic costs even if Congress ends up extending support at the last moment.
Source: The New York Times
