Trump's Right: We Must Get the U.S. Economy Back Up & Running

If imposed nationally & for an extended period, an economic lockdown would be a catastrophe for the American people.

By Stephen Moore & Ed Feulner

Last week's labor market report showed 3.3 million Americans signed up for unemployment benefits — almost five times higher than any other month in history. Without a smart and medically responsible reopening of the U.S. economy soon, that number could soar to 30 million unemployed.

This is why President Trump was right when he said last Monday “we cannot let the cure be worse than the problem itself.” There isn’t enough gold in Ft. Knox to pay prolonged unemployment benefits to that many workers and for the associated economic damage.

The public seems to approve of that strategy as Trump’s approval rating has soared to near 60% — the highest of his presidency. He's given Americans a sense of optimism that this lockdown can end in many parts of the country in weeks, not months, with the right, smart public health safeguards in place.

Not surprisingly, President Trump has been under heavy criticism from some in the media and many Democrats in Congress for this strategy of trying to get the economy opened. The New York Times even recommended the opposite strategy of a nationwide economic lockdown — which would cripple our economy with trillions of dollars in permanent losses.

Trump’s strategy in no way minimizes the severity of this deadly “invisible enemy,” as the president has called the coronavirus. But it does calibrate into our decision that the devastation to the U.S. economy is starting to surpass the mortgage and banking crisis of 2008.

The extraordinary lockdown measures pushed by Governors Andrew Cuomo of New York and Gavin Newsom of California may be necessary in these heavily hit states. About half the infections have happened in New York, which has become ground zero for the virus in America. But other areas  around the country – such as Idaho, Iowa & Utah – have fairly low caseloads.

If imposed on a national basis and continued for an extended period, a lockdown would be a catastrophe for public health, the economy, and the American people.

The biggest victims will not be wealthy hedge fund managers losing a fraction of their portfolio:

• The Wall Street Journal reports that the families being hit hardest by the paralysis of our economy are those with the lowest-income workers.
• We’re talking about real Americans losing their life savings and their 401(k) plans that they’ll depend on in retirement.
• We’re talking about the small business owners having to tell their employees not to come back to the office, and
• The single mother who’s held down a job and worked hard her whole life having to hitch a ride to the unemployment office.

America is the business capital of the world, with 26 million men and women owning and operating small and medium-sized firms. Millions will crash into bankruptcy with a prolonged lockdown — regardless of the federal government’s business loan rescue program.

Income and revenues are the oxygen source of any small business, and most have seen their customer base fall by half or even to zero through forced closures.

Because of the shutdown, Goldman Sachs is now forecasting GDP growth at a negative rate for the first quarter of 2020, with possible declines of 10-to-20% in the next quarter. Moreover, we are now seeing weakness in the U.S. commercial mortgage industry and the banking sector, which could cause a “domino effect” that could dwarf the negative impact of the Great Depression.

But this economic carnage is avoidable.
 
No plan is perfect, and there are risks and tradeoffs with any strategy. Instead of imposing a blanket-wide shelter-in-place on a national scale, President Trump continues to reiterate that any decision regarding the reopening of the U.S. economy would be “based on hard facts and data,” be “grounded solely in the health, well-being and safety of our good citizens,” as any decision impacting the safety of Americans should.

There is no getting around it: the health, well-being, and security of America’s 320 million citizens depends on a functioning economy. We have a $20 trillion highly tuned economic engine — the envy of the world. That engine can’t be shut down for months and then with the switch of an ignition be powered back up.

Getting America back to work soon, while taking all necessary measures to contain the coronavirus, is a balanced and wise solution.

Ed Feulner is the former president and founder of the Heritage Foundation, and Stephen Moore is a senior fellow at Heritage. Moore is the co-author of Trumponomics: Inside the America First Plan to Revive the American Economy.