US Battens Down the Hatch, Economic Relief in the Works

The United States will start the week in a much higher state of lockdown than last, thanks to several rapid developments in the evolving coronavirus pandemic. Major league seasons have been suspended, and all non-essential gatherings of more than 50 people could be banned in much of the country this week. California, perhaps the first of many states to do so, will order all bars and restaurants to close to limit the virus’ spread.

The country is entering a new phase in the pandemic. Citizens across the nation are beginning to self-quarantine without symptoms out of fear of contracting the virus. Nursing homes are especially vulnerable to a nasty outbreak, due to the close proximity of residents and the vulnerability of the elderly to the disease.

Panic buying is in full force. Essential items are now difficult to find in grocery stores across the country. Like the rest of the world, toilet paper is a notable panic buying casualty. Finding a pack is more difficult now than in recent memory, despite its irrelevance to the disease.

Economic Relief in the Works

The virus is undoubtedly going to have a major impact on the US and global economy, at least in the first half of this year. With virtually the entire world starting to work from home, the United States is trying to anticipate and soften the economic fallout. Over the weekend, the Federal Reserve cut interest rates to 0%.

With interest rates now at zero, the Fed has few tools left to keep the economy churning along. An economic relief bill was quickly pushed through Congress to help mitigate the damage to both Wall Street and Main Street. This includes free testing and paid sick leave for millions (but not all) of American workers. President Trump helped ensure a speedy passage by throwing his full support behind the measure.

Another bill will likely be passed this week, specifically providing relief to the embattled travel industry, from hotels to airlines.

The president, after declaring a state of emergency, has also freed up billions of dollars to respond to the virus. While most of this response will naturally be in the form of public health measures, including free tests, masks and disinfectants, the president may seek innovative ways to use some funds to lessen the economic fallout.

Europe: The New Epicenter of COVID-19

China is no longer driving the global growth of coronavirus cases. That distinction is now held by the European Union. Across the continent, the official case and death count continues to surge. There are now roughly 40,000 confirmed cases on the continent, and the trend is for these figures to continue to grow exponentially. The number of cases confirmed outside of China will likely pass China’s total case count this week.

Italy’s death toll is now approaching 2,000. The country saw the first major outbreak on the continent, and also has the highest official death rate in the world. Iran, whose numbers are less credible, may have seen a higher fatality rate.

President Trump controversially shut down all non-resident visits from Europe last week. This move now appears increasingly prescient, as the virus spreads rapidly in several European countries including France, Spain and Italy.

The Morning After

Despite the epidemic of fear gripping the United States, the country has faced disaster before and emerged stronger as a result. This includes the outbreaks of major diseases including polio, which took the life of FDR, and Spanish influenza. The Trump Administration, backed by an unusually robust Congress, is responding with an appropriate level of urgency to the disease.

We will continue to see the government mobilize its massive resources to combat the disease and soften its impact on society. It is difficult to gauge how long the situation will last, but it is important to remember that, like previous disasters, we will see the other side.