Should President Trump declare all-out war on the coronavirus by closing all nonessential U.S. businesses? The Federal Reserve has fired its bazooka, cutting short-term interest rates almost to zero and enacting other stimulus measures first adopted during the Great Recession in 2008 as the new coronavirus rattles the economy, but even that might not be enough.
Today, the president recommended avoiding gatherings of more than 10 people and also urged Americans to avoid eating and drinking at bars and restaurants.
“Each and every one of us has a critical role to play in stopping the spread and transmission of the virus,” Trump said. “If everyone makes this change or these critical changes and sacrifices now, we will rally together as one nation, and we will defeat the virus, and we’re going to have a big celebration altogether. With several weeks of focused action, we can turn the corner and turn it quickly.”
Why not just shut the whole country down?
The federal government could take steps to close nonessential businesses while testing to determine whether the virus is dramatically intensifying. Washington couldn’t literally prevent all Americans from leaving their homes, but most business owners would comply. People would mingle far less, reducing the rate of infection for a virus that spreads exponentially without any barriers in place. It might be the best way to “flatten the curve” and get the upper hand against the malevolent bug.
Analyst Ed Mills of Raymond James posits four scenarios for where we’re headed from here, including a “stop everything” situation in which all businesses that can shut down for two weeks do so. If that happens, Mills sees the total number of U.S. infections staying below 500,000, with a turnaround coming by late April. The economic harm would be substantial, but this measure could be an overwhelming force that defeats the virus relatively quickly. Congress would be able to repair some of the economic damage through fiscal stimulus programs.
Under the other three Raymond James scenarios, Washington continues to take an incremental approach. There are more infections and deaths, persisting through the spring, summer or fall, depending on the aggressiveness of government action.