We Can’t Have An Economic Recovery If We Don’t Improve Health Care Right Now
We must not choose between staving off economic catastrophe or a public health disaster. We can do both — if we immediately expand Medicare to cover everyone while safely and simultaneously rebuilding our healthcare infrastructure."
The United States confronts two interrelated problems that make the coronavirus pandemic uniquely devastating — a lack of a functioning health care system, and an inability to organize and implement an effective quarantine.
If free mass testing had been available early on, and if the production of protective equipment, bed capacity, and ventilators had immediately ramped up under government direction, nationwide shelter-in-place orders might not have been necessary, as they were not in east Asian countries that have more effectively responded to the virus.
But now that they are absolutely necessary, they’re still not in place — compounding an already horrifying situation.
The responses from both the Left and the Right have been wildly blinkered at a time when we desperately need systemic thinking. On the Left, there’s a tendency to blame everything on Trump, but even more troubling is the false dichotomy that Americans’ health matters more than the economy.
There’s been a lot of talk around Trump’s claim that “the cure cannot be worse than the disease.” But the truth is in a country with next to no welfare state, mass unemployment also comes with real human casualties — we need look no further than the mass deaths of despair which followed the 2007–8 crisis. Some even modest reignition of the real economy is needed in the not-too-distant future if we are to avoid the worst.
On the Right there’s a similar denial of reality, but from a different perspective. The idea that we can lift restrictions in two weeks and things will go back to normal is just outright delusional. The cat’s out of the bag, and even young people now know that they are not protected from the ravages of the virus. In any event, the infection rate and death toll two weeks from now will silence even the brashest of pandemic denialists.
Spurning historical analogies as dangerously inadequate, economic historian Adam Tooze believes the best point of comparison we have for the kind of social pain we’re destined for is, ironically, the actual medical treatment for a severe case of COVID-19:
In a stimulus the idea is to use government spending to create a chain reaction that dynamizes the private economy and puts people back to work. And that’s the opposite of what we need. What we’re actually trying to do is [create] a medically-induced coma, to put the economy on life support, knock the economy out for a period of two to three months. The purpose of the $2 trillion (and there will need to be more) … is to tide people over, to enable us to get through this without excessive scarring. Because the real worry when you do this, just as when you put a patient … on a ventilator, is that there is lasting damage.
Given the inadequacy of the United States’ response, two to three months of economic life support should probably be seen as the very minimum of what we need. Matthew C. Klein has estimated that putting the economy “on ice” in this manner “will require trillions of dollars of government borrowing and spending, possibly more than $10 trillion.” The alternative is an “inevitable decline in consumption from reducing incomes in affected sectors, which would lead to further cuts in spending and a downward spiral hitting the rest of the economy.”
The $2 trillion coronavirus relief package is thus just the beginning. Much, much more will be needed, and I sincerely hope that in future negotiations, someone will step up to buck the bipartisan consensus that a measly handout to working people should go hand-in-hand with a massive and unnecessary bailout for corporations.
But the idea that trillions in federal spending can keep the economy on life support — itself untested and anxiety-producing, even if it’s the best we have — contains a very big and very unwarranted assumption: that the outbreak will be “contained” such that economic activity can resume as normal by midsummer.
The strategy effectively employed by South Korea and Hong Kong of mass testing, contact tracing, and quarantine is simply not going to work here. The testing kits aren’t going to be made fast enough, and thanks to Trump’s devolution of kit regulatory authority to states, many of the tests that will be available won’t be reliable. The real bottleneck, however, is with personal protective equipment for health care workers, who have been left to fight a “war with no ammo.”
The resulting inability to track and contain the virus is, however, but one of our problems. Much more concerning is the current lack of capacity: most American hospitals were already running near capacity pre-coronavirus, and they will soon very rapidly be, if they are not already, totally overwhelmed with COVID-19 patients. In China, the fatality rate in Wuhan was 5.8 percent, a full eight times what it was in the rest of the country (0.7 percent). The difference was an overwhelmed health care system in the epicenter of the virus outbreak.
Given the brokenness of our health care system, the death toll in the United States will probably be the highest of any industrialized country in the world. It will be visible and agonizing, and even after it peaks, it’s still unlikely that we’ll have the necessary means to track and contain the virus. People will only get more frightened of going outside as the bodies mount, a situation likely to be compounded by violent expressions of social unrest. In three-months’ time — on our current trajectory — the prospects for taking the economy “off ice” will be no more rosy than they are today.
This is, if you will, the purely economic argument for a massive improvement in the American health care system right now. We can come up with a panoply of brilliant tricks for putting the economy in a medically induced coma, but without dealing with the outbreak in the meantime, there will be nothing to wake it up for.
The ugly choice presented to us — our health or the economy — is thus a false one, not because we can successfully “do both” in any meaningful way at this time, but because a much better mitigation of coronavirus fears is an absolute prerequisite for avoiding the worst-case economic scenarios.
America’s health care system has been designed around private rather than public interests. It is propped up by unnecessary elective procedures and expensive administrative bloat all to line the pockets of health insurance and pharma CEOs. Now we have a very real and very public problem of necessity, and our patchwork, for-profit embarrassment is unsurprisingly going to fail us.
Luckily, everyone knows what needs to be done: Immediately expand Medicare to cover everyone so that we can aggressively treat and trace cases to slow the spread of COVID-19. Use the Defense Production Act to ramp up as fast as humanly possible the production of testing kits, protective equipment, and ventilators. Enact nationwide shelter-in-place restrictions, and redirect every possible government agency, including the Armed Forces and the Army Corps of Engineers, toward the coordination of supplies and the construction of “mild care” units to alleviate the burden on hospitals.
These things need to be done to save lives in the near term, but let’s stop talking like this is just about the virus. They also need to be done to avoid the kind of economic collapse that would undoubtedly take a different but no less deadly toll on American workers.
If the economy truly tips into a depression, then it’s not just the portfolios of the wealthy which would take a hit. It’s the lives of anyone who already struggles to survive in America. They would then be faced with two major threats to their health — both an economic and a biological pathogen.
If they survived one, they might not survive the other. And that’s a price we cannot pay.