Spotlight: U.S. states rush to reopen economy, but soaring death toll could be the price

Source: Xinhua| 2020-05-07 15:28:58|Editor: huaxia

by Xiong Maoling, Gao Pan, Tan Jingjing

WASHINGTON, May 6 (Xinhua) -- As COVID-19 continues to sweep across the United States with over 1.2 million people infected so far, several states have recently started to reopen their economies.

Models have projected a sharp rise in deaths as states gradually loosen containment measures, and public health experts, as well as economists, have voiced disagreement with such a quick resumption of economic activities.


Dozens of states have rolled out reopening plans in late April, with Georgia, Oklahoma, South Carolina, Tennessee and Texas among the first to allow certain nonessential businesses to resume operations.

With the U.S. economy witnessing its biggest slump since the global financial crisis, with over 30 million Americans filing for jobless aid within weeks, the potential economic recovery following reopening could be welcoming news for many.

White House economic advisor Kevin Hassett recently told Fox News that every U.S. state will mostly reopen by the end of May, and most forecasters predict an economic rebound in the second half of the year.

At an event in Phoenix, Arizona, President Donald Trump on Tuesday said the country couldn't stay closed for years. "We have to get our country open, and we have to get it open soon," even if some people will be affected badly, he said.

He recently criticized some states for not moving fast enough, saying that hard-hit states, such as New York, might take longer to resume economic activities, but some other states could speed things up.

As of Wednesday night, over 1.2 million people have been infected across the country, with the death toll surpassing 73,000, according to Johns Hopkins University.

Deborah Birx, coordinator of the White House coronavirus task force, said a few weeks ago that cases are "starting to level." While new reported cases of COVID-19 continue to drop in some areas, a nationwide significant decline is yet to come, with the country stuck on a prolonged plateau.

Meanwhile, newly released data from Automatic Data Processing (ADP) showed that private companies in the United States shed around 20.2 million jobs in April as the COVID-19 fallout continues to ripple through the country.

A report from the New Yorker said the Trump administration's early reopening looks like a "reckless gamble" to get the economy going before the November presidential election, as a booming economy is what Trump hopes to ride to a second term.

According to a recent projection from the Wharton School of the University of Pennsylvania, partially reopening would increase GDP on June 30 by 1 percent year-on-year, to a 10.7 percent contraction. About 4.4 million jobs would be saved, although a total of 14.0 million jobs still will be lost between May 1 and June 30.

Fully reopening would boost GDP on June 30 by about 1.5 percentage points year-on-year compared with not reopening, the model showed. Almost all net job losses between May 1 and June 30, over 18 million, would be avoided.


The potential economic recovery following the reopening, however, doesn't come without a price. According to the Wharton model, partially reopening would cause 45,000 additional deaths by June 30 relative to not reopening. Fully reopening would lead to an additional 233,000 deaths.

A COVID-19 model produced by the University of Washington revised its projections on Monday, estimating over 134,000 COVID-19 deaths in the United States through August, about 60,000 more from an earlier projection less than a week ago.

The revised projections reflect rising mobility in most U.S. states as well as the easing of social distancing measures expected in 31 states by May 11, indicating that growing contact among people will promote transmission of the coronavirus, according to the team.

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told CNN earlier this week that the balance of containing the outbreak and managing the economic consequences is a very difficult choice.

Fauci said the country shouldn't open up the economy and loosen restrictions unless things begin to come down, otherwise, it would face spikes in infection, which could be dangerous.

With states reopening their economies, the daily death toll will soar to 3,000 on June 1, up from the current number of about 1,750, according to an internal document obtained by The New York Times. The administration forecast about 200,000 new cases a day by the end of the month, up from about 25,000 cases a day currently.

Containing the outbreak is not only a joint call from public health experts, but also economists. Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana, recently told Xinhua via email that he thinks "the evidence strongly backs the aggressive initial shelter-in-place orders."

"However, as we learn more about the disease, easing some of those restrictions seems wise," Hicks said, while warning that a second wave of infections would be "very damaging to the economy."

Lawrence Summers, treasury secretary for former President Bill Clinton and economic advisor to former President Barack Obama, said in a webinar Tuesday that getting the virus under control is "overwhelmingly more important" than anything else in order to get the economy back on track.

"If people are scared to go outside, they're scared to go out to the store, they're scared to be near each other, you're not going to have a decently functioning economy no matter what fiscal and monetary policy you have," said Summers, who is also a professor at and past president of Harvard University.

Echoing Summers' view, Ryan Sweet, a senior director at Moody's Analytics, wrote in a recent analysis that the reopening of nonessential businesses only suggests a diminishing supply-side shock. "Even if some businesses reopen, particularly for consumer services, people may continue to self-quarantine," he said.

Indicators including seated diners from OpenTable, a restaurant-booking platform, and movie box office receipts "have yet to show any increase," Sweet noted.


Public health experts have argued that with a lack of large-scale nationwide testing and tracking the close contacts of those infected, many states are not well prepared to reopen.

Fauci recently said the country should at least double coronavirus testing in the coming weeks before gradually reopening the economy, up from about the current 1.5 million to 2 million tests per week.

As officials are eager to get the economy going, the American public seems more reluctant. A Washington Post and University of Maryland poll released Tuesday showed that while 56 percent of respondents are comfortable going to the grocery store, 67 percent would be uncomfortable visiting a retail store and 78 percent would be uncomfortable going to a sit-down restaurant.

Still, several states, including Michigan, Illinois and California, have seen protests in recent days amid a mounting economic fallout, as protestors demand local governments ease stay-at-home restrictions and reopen economies.

President Trump tweeted his support for protesters in Michigan, urging Democratic Governor Gretchen Whitmer to "give a little" and make a deal. Whitmer, however, said her decision on reopening will not be based on arbitrary timeline or political pressure.

Commenting on Trump's executive order to require meat processors to stay open, Hicks called it a political stunt.

"Of course businesses wish to remain open, but they cannot endanger the health of workers or run operations with an insufficient labor force," he said, urging the administration to increase the production of personal protective equipment to safely reopen factories.

Jeffrey Sachs, economics professor at Columbia University and a senior United Nations advisor, told Xinhua via email that the U.S. situation remains "bad and confused, with an absence of a national-level strategy" for suppressing the virus, and therefore with no reliable strategy for the economic recovery."

The United States "lacks the leadership, systems, and discipline to open safely," Sachs said. "I'm afraid that the epidemics will continue to break out around the country, maybe at reduced ferocity but the U.S. is unlikely to get things under control rapidly and decisively," he said.

"I fear that it is too disorganized and badly led for any decisive breakthrough at the moment," he added. Enditem