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American economist: deregulation has not helped the economy

via:cnBeta.COM     time:2020/3/26 9:31:00     readed:82

According to foreign media reports, COVID-19 current pandemic continues in the United States and shows no signs of slowing, yet US President Donald Trump has urged easing travel restrictions."We have to get our country back to work," trump said Tuesday on Fox News's "town hall." "This treatment is worse than the problem. If we allow this situation to continue, there will be many (I think more) deaths. Our people must return to work. "

He sees Easter Sunday, April 12, as a potential end date for restrictions, and he looks forward to seeing "church crowds" across the country.

But there is a problem with trying to restart the economy by easing controls: economists don't think it works. Maurice Obstfeld, a professor at the University of California at Berkeley and a former chief economist at the International Monetary Fund, said the economy could not recover unless the pandemic was contained. Obstfeld told The Verge:" we must stabilize the level of infection before we start economic activity again ." If we act too early, he fears that we will see a new increase in infection ," now we should face the health crisis more decisively, or it will do more damage to the economy ."

In recent years, conservative media have increasingly put forward the idea that curbing restrictions does more harm than good. During Monday's Fox News interview, Texas Governor Dan Patrick (Dat Patrick) appeared to call for widespread lifting of restrictions, regardless of human factors. "My message is, let's get back to work ," Patrick told Tucker Carlson. "Let us return to normal life. make us a little smarter. And those of us over 70 will take care of ourselves. But do not sacrifice this country.

Former Fox presenter Glenn Baker (Glenn Beck) described it even more harshly. "I want my children and all those over 50 to stay at home ," Beck told the audience on Tuesday night. Even if we are all ill, I would rather sacrifice myself than my country.

As those experts say, the recent economic collapse was caused by public health restrictions rather than the coronavirus itself, and deregulation could mitigate the damage. But economists who study recessions say a return to normal activity is likely to cause more economic damage.

Given the exponential increase in the disease, University of Michigan economist Justin Wolfs (Justin Wolfers) said the cost of stopping the spread is now cheaper than the cost of future measures. "The choice is whether major action is being taken today when tens of thousands of cases occur, or if there are hundreds of thousands or millions of cases, is there more action in the future ," he said.

According to data collected by Johns Hopkins University, confirmed U.S. cases grow at about 38 percent a day. Mortality increases at a rate of about 23 per cent per day, suggesting that some increases in the number of cases may be the result of accelerated testing. Nevertheless, any relaxation of social distance can lead to a surge in these numbers, with devastating consequences for public health and economic activity.

As a result, even sceptical economists suggest targeted responses rather than a return to the status quo. Harvard economist James Stoke (James Stock), a member of the National Bureau of Economic Research, said he believed public health responses had diluted the ongoing economic crisis.

"I think the right framework is how to allow some economic activities while at the same time reducing the spread of the virus most effectively," stock told the verge However, more testing is needed before meaningful recovery measures can be taken. "There is an urgent need for random testing of the population to understand its prevalence and asymptomatic rate."

Countries like South Korea have been able to control the epidemic by testing the population extensively (whether people have symptoms or not) and then isolating those who test positive. But the US still faces a serious shortage of test kits, which means doctors can not even test every symptomatic patient. Without more tests, it will be difficult to grasp who is at risk of spreading the disease and to relax the restrictions on infection.

It is unclear how the White House plans to proceed. At a news conference at 5:30 p.m. eastern time on tuesday, the us president continued to mention the goal of returning to work on easter, but seemed to lower expectations of ending social segregation. Trump said :" I hope Americans will be able to return to work again on that beautiful Easter day, but rest assured that every decision we make will be based on American health, safety and well-being ."

At the same time, experts believe that the economic crisis will be difficult to separate from public health issues. "What I'm worried about is that it's hard for us to get the best of both worlds right now: the economy is stalled and public health's response to the pandemic is ineffective," Obstfeld said. The answer is not just to pretend that we can work as usual. "

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