The Federal Reserve Bank of St. Louis recently estimated that the U.S. unemployment rate might exceed 30% in the next few months. If this happens, it won’t be the inevitable consequence of the coronavirus pandemic and the associated public health response. It will be the fault of elected officials for failing to pursue a solution that’s right in front of them.
I call it the paid staycation.
In the absence of widespread testing, tracing and quarantining, mandatory social distancing is the only way to reduce the human toll of COVID-19. So it’s necessary, even desirable, that economic activity decline —possibly by a lot. Millions of Americans must cease work, possibly for a long time, in order to combat the pandemic. Hence the forecasts that the unemployment rate will rise to double digits, and potentially to Depression-era levels.
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