Italy a country at the heart of the Corona virus outbreak in Europe — watched its number of cases and deaths due to the novel Corona virus astronomically leap once again, up 793 deaths with 6,557 newly confirmed cases recorded in just 24 hours.

Saturday’s jump marks the worst day for fatalities since the crisis began just four months ago. The country now counts 53,578 diagnosed infections, up 13.9 percent, with 4,825 deaths — the highest in the world.

More than 60 percent of the most recent deaths occurred in the northern region of Lombardy. Hospitals in the area have been reeling under a staggering caseload that has left intensive care beds scarce and respirators in extremely limited supply.

According to the Financial Times, 2,857 people were in intensive care in Lombardy on Saturday, up from 2,655 on Friday. The new increases come almost two weeks into a nationwide lock down in an attempt to stop the COVID-19 virus in its tracks there.

There were also 943 full recoveries tallied yesterday — another record for the country.

On Thursday, Italy was witness to yet another grim milestone in its fight against the deadly disease by overtaking China to become the country with the highest number of deaths.

On Friday the government banned the last types of outdoor exercise Italians were able to participate in under the lock down measures by deciding that running and bicycle rides were no longer permitted. In addition, the Italian military has also been dispatched to Milan to ensure that citizens follow the new lock down measures.

The Italian interior ministry reported that more than 223,633 people were inspected by the Italian police nationwide on Friday, with 9,888 people reported for breaking the lock down measures and 260 for false declarations about why they were outside.

Across the Atlantic, the number of cases in the United States has now exceeded 22,000 with more than 270 deaths. New York tops the list with at least 10,000 confirmed cases; Washington state follows with just over 1,500 cases, and California is in tow with more than 1,200.

Thus far, the global pandemic has infected more than 287,000 people and killed over 11,900. More than 90,000 people have recovered so far, mostly in China.

The Associated Press and The Financial Times contributed to this report.

I found this article in the Economist discussing what the economic influence would be from the COVID-19 pandemic. The titular conceit of “28 Days Later”, as with many contagion-style horror films, is of a man waking up after a month-long coma only to find society upended by a rampaging virus. Many Americans are experiencing something similar. On March 3rd there were just 122 confirmed cases of COVID-19—the disease currently sweeping the world—and only seven deaths. By March 17th there were 7,786 confirmed cases (even these were a sure underestimate given the dearth of testing) and 118 deaths. Twenty-eight days later, on March 31st, what might America look like?

“We don’t know whether we’re going to look like Italy or the provinces outside Hubei” in China where the spread of COVID-19 was fairly effectively contained, says David Blumenthal, president of the Commonwealth Fund, a health-policy think-tank. “But the likelihood is—given the slowness with which we responded to the epidemic—that we look more like Italy,” he adds. Jerome Adams, the surgeon-general, has warned of the same.

Can America’s health system cope? The structural problems that make pandemic response more difficult—lack of paid sick pay, a large uninsured population and a significant number of insured people nonetheless worried about out-of-pocket medical bills—cannot be mended overnight. Instead, public-health experts and doctors are increasingly worried about sheer capacity constraints. In China, 5% of those diagnosed needed intensive care. There are roughly 97,000 beds in intensive care units (ICUs), of which one-third are empty. Though America has relatively few total hospital beds per person compared with other countries, it ranks among the highest for ICU beds per person, with nearly three times as many as Italy.

“The real limiting factors are likely to be the ventilators or the staff,” says Greg Martin, a professor of medicine at Emory University and president-elect of the Society of Critical Care Medicine. There are roughly 50,000 physicians trained in critical care and 34,000 similarly specialized nurses and assistants. This could be insufficient in the face of hundreds of thousands of cases at peak rates of infection.

Then there is the problem of kit. In China, half of those in critical care required the use of ventilators, machines that help people breathe. There are thought to be 62,000 full-featured mechanical ventilators in the country, many of which are already in use. Older stocks of perhaps 100,000 devices—including CPAP machines used for those with sleep apnea—could be called upon if needed, but would provide only basic functions. Ramp-ups in ventilator production are being pondered, including through emergency powers given to the president under the Defense Production Act of 1950, but there has been little actual action yet. On a phone call with state governors, President Donald Trump urged “respirators, ventilators, all of the equipment—try getting it yourselves”, which could spark an unhelpful competition between states for scarce resources.

“Under almost any basic scenario, things look tough. Hospital beds will be completely full many times over if we don’t substantially spread the load,” warns Ashish Jha, director of the Global Health Institute at Harvard. To head that off, Mr Jha has called for an Italy-style national quarantine, lasting for at least two weeks, in which all non-essential businesses are closed and gatherings of more than five people are barred to give time for testing to become widespread. After a dismally slow start to testing, the numbers are finally heading up—although the best estimates come not from public-health agencies, but volunteer trackers using a Google sheet—to an estimated 12,535 tests conducted on March 17th. Given the expected scope of the disease, and the reported obstacles to people with symptoms actually getting tested, much more will be needed.

Most hospitals are making contingency plans. There are plans to add physical beds by cancelling elective surgeries that can be postponed, converting recovery rooms into added beds and building tents to house some patients. The Cleveland Clinic, a prominent hospital, says it has plans in place to add 1,000 beds of capacity within 72 hours if needed. Teams of doctors and nurses with other specialties could be conscripted into critical-care work, supervised by critical-care doctors who handle the trickiest cases—like respiratory distress coupled with organ failure in the kidneys or heart. If this is insufficient, recently retired doctors could be drafted into service. Some teaching hospitals are using simulation centers to prepare medical staff for the inevitable surge in cases.

Testing? Testing?

Whether it will come to all this is still unclear. Testing capacity remains constrained, limiting the information epidemiologists have to feed both their models and their willingness to speculate. Their policy recommendations—social distancing, closure of schools and large gatherings—are nevertheless clear. One team of researchers has concluded that an epidemic resembling that of Wuhan, where the novel Corona virus first broke out, would overwhelm hospitals many times over, while one resembling Guangzhou, a city that locked down in the early days of the virus, could be dealt with.

On March 16th, however, a team of scientists based at Imperial College London, who have been advising the British government, also published forecasts of the epidemic’s trajectory in America. As with Britain, the figures look grim. Without any mitigation, America would experience 2.2m deaths, they predict. Even in the case of some mitigation—isolation of the sick, social distancing for the elderly, but an otherwise normal society—American hospital and ICU capacity would be exceeded eight times over, and the country would be on track for at least 1.1m deaths. Averting this through “suppression”—isolation of sick, closing of schools and universities, social distancing for everyone—would require months until therapeutics or vaccines can be developed.

America is therefore turning towards suppression of the virus. Millions of pupils and university students have been sent home and left to take classes online. Mr. Trump has advised that people not congregate in gatherings of more than ten people. San Francisco and surrounding counties have issued a “shelter-in-place” order that requires 7m to remain in their homes unless necessary. New York City is expected to do the same for its 8m residents. In 22 states, bars and restaurants have been ordered to close their seating and only serve takeaway. The state of New York is setting up drive-through testing centers, starting in New Rochelle, a commuter town in Westchester County that was one of the early sites of a COVID-19 cluster, and is urging federal troops to build emergency, temporary hospital facilities. New Rochelle’s mayor says he is surviving the lock down there on “adrenalin, coffee and M&Ms”.

The goal is to increase general hospital capacity by a factor of two and ICU capacity by a factor of ten within two months. Elections have been postponed in a few states for the Democratic primary, which now seems a dull, distant affair. America’s devolved system means that the shuttering will happen at different rates in different places, but the trajectory is clear. “You want a single national response. But when the federal government completely fails, as it has so far, then you can get states and cities to step up,” says Mr. Jha.

The question is how long this can go on for. Unmitigated, the epidemic would not peak for at least another three months. Suppression can reduce the spread of the disease, as China’s experiment with locking down most of its population showed, but relaxing these measures will inevitably bring another surge in cases. Mr. Trump, who a few weeks ago was suggesting the virus was the latest hoax invented to damage him, is now warning that this could be the start of a months-long reorientation in American life. And while these extraordinary actions should smother the disease, they will also smother the economy.

The dismal economic forecasts will require further action from Congress. It spent the last week haggling over a bill that would make testing for the disease free, increase the flow of safety-net benefits and grant paid sick leave to more workers (though this provision appears to be hollowing out with every iteration). Even before that bill was finalized, Washington’s attention had already turned to the even bigger economic stimulus package that must come next. Senators, both Democrats and Republicans, are tripping over themselves issuing plans to send cash directly to American families.          

The total package, which could be worth $1trn or more, dwarfs the $100bn-or-so bill recently signed into law and every other stimulus package in history. The Trump administration has proposed sending $500bn in direct cash to taxpayers, $300bn to keep firms afloat, and $200bn to bail out critical industries like airlines. The typical partisan bickering from Congress and even from Mr. Trump has been muted. Every politician seems to now realize that the country faces an unprecedented crisis, first of public health and then of the economy, that will last for months. Whether this action will look sufficient 28 days later is, as with seemingly every aspect of the Covid-19 pandemic, deeply uncertain. ■

Ethicists agree on who gets treated first when hospitals are overwhelmed by Corona virus 

As a member of our Ethics Committee I thought that the decisions that physicians and staff in other countries were facing regarding who gets the ventilators was an interesting conundrum. This article contributed by Oliva Goldhill in her article, The Aging Effect, is a great introduction into the decisions that we may have to make here in the US. Pandemics bring ethical dilemmas into sharp, terrible focus. Around the world, hospitals have been unable to cope with the millions who need treatment for Corona virus. China created makeshift hospitals and denied treatment to those who needed non-Corona virus care; Italians wait an hour on the phone to get through to emergency services. Few countries will fare better: The United States has fewer than 100,000 ICU beds, and is expected to need a minimum of 200,000 to cope with Corona virus; the UK has just 8,200 ventilators and is getting an extra 3,800.

As health care systems are overwhelmed with more patients than they can feasibly treat, medical personnel are forced to decide who should get the available ventilators and ICU beds. Quartz spoke with eight ethicists, all of whom agreed that in such dire situations, those who have the best chance of surviving get priority. Despite the unanimity, all agreed that this decision is far from easy and should not be taken lightly.

Different moral theories, same answer

The decision to prioritize those with good survival odds is reinforced by several moral theories. Utilitarianism, for example, argues that morality is determined by the consequences of actions, and so we should strive to create the maximum good for the maximum number of people. “If we give scarce treatments to those who don’t stand to benefit (and have a high chance of dying anyway), then not only will they die, but those with higher likelihood of survival (but require ventilator support) will also die,” says Lydia Dugdale, professor of medicine and director of the center for clinical medical ethics at Columbia University. “It’s not fair to distribute scarce resources in a way that minimizes lives saved.”

A contrarian theory, which bases ethics on the social contract we would agree to if we didn’t know our status in society, arrives at the same conclusion. Joshua Parker, a trainee general practitioner (primary care doctor) who co-wrote an article on the ethics of Corona virus care for the Journal of Medical Ethics, points to philosopher John Rawls’ concept of a “veil of ignorance” as a way to determine the just action: “Behind the veil of ignorance, I am stripped of any knowledge of my position. I don’t know if I’ll be old, young, rich, poor, well, unwell, male or female; and I don’t know if I will catch COVID-19 or if I do, what resources I will need,” he writes in an email to Quartz. This thought experiment makes it easier to judge what’s fair for society as a whole. Alex John London, director of the Center for Ethics and Policy at Carnegie Mellon University, agrees: “Such agents might agree that in a pandemic, when not everyone can be saved, health care systems should use their resources to save as many lives as possible—because that is the strategy that allows each person a fair chance of being able to pursue their life plan.”

Even typically diverging ethical theories are likely to point to this conclusion. Utilitarianism, which focuses on the consequences of an action, is typically opposed to deontology, which says morality is determined by the act itself. “The deontologist might well start with a justice argument: each person is individually valuable and should have an equal chance of health care,” says Anders Sandberg, a philosopher at the Future of Humanity Institute at the Oxford University. But if this is simply impossible, then the theory doesn’t hold. “As Kant said, “ought implies can,” and if one cannot do an action it cannot be obligatory.” A deontologist approach to treat everyone equally falls short when there simply isn’t enough medical equipment to treat everyone; if some will have access and some won’t, then we have to face the question of who gets preferential treatment. And so “even the most die-hard deontologist will usually agree” that it’s wrong to treat people who are unlikely to benefit while others are in need, agrees Brian D. Earp, associate director of the Yale-Hastings Program in Ethics and Health Policy at Yale University and The Hastings Center.

Doctors have reckoned with the need to allocate resources in the face of overwhelming demand long before Corona virus. Dugdale points out that the New York department of health’s ventilator allocation guidelines, published in November 2015 to address the issue amid a flu epidemic, states that first-come first-serve, lottery, physician clinical judgment, and prioritizing certain patients such as health care workers were explored but found to be either too subjective or failed to save the most lives. Age was rejected as a criterion as it discriminates against the elderly, and there are plenty of cases in which an older person has better odds of survival than someone younger.

So the decision was to “utilize clinical factors only to evaluate a patient’s likelihood of survival and to determine the patient’s access to ventilator therapy.” In tie-breaking circumstances, though, they did approve treating children 17 and younger over an adult where both have an equal odds of surviving. Dugdale adds that there’s talk of applying these guidelines to address Corona virus treatment in New York.

No good answer

The dire consequences of any decision made under such extreme circumstances means that, despite agreement, the best course of action is hardly favorable. “I would say that leaving some to die without treatment is NOT ethical, but it may be necessary as there are no good options,” David Chan, philosophy professor at the University of Alabama at Birmingham, writes. “Saying that it is ethical ignores the tragic element, and it is better that physicians feel bad about making the best of a bad situation rather than being convinced that they have done the right thing.”

Rather, it’s simply the least bad option. Alternatives, such as a lottery system or prioritizing the sickest, are likely to lead to more deaths. “There is a good chance that we invest resources into patients who don’t survive, and we have thus doomed not just the patient we tried to save, but also the patient who was passed over for care, because the resources have been used up,” says Vanessa Bentley, philosophy professor at the University of Alabama at Birmingham. “Lives that could have been saved were lost.”

Although there’s broad agreement on the best approach, the nuances of applying this decision will always be difficult. Not only must doctors accurately assess and prioritize those with the best chance of survival, but there could also be times when the hospital doesn’t have enough equipment to help even those with equal odds. Italy has prioritized treatment for those with “the best chance of success” but adds as a second criterion those “who have more potential years of life.” This secondary factor is not so easily agreed upon but, in the face of Corona virus, it’s an ethical question doctors will have to face.

Governments are spending big to keep the world economy from getting dangerously sick

The help is targeted at companies and individuals. More will be needed

In the recent edition of the Economist Today it was noted a character in a novel by Ernest Hemingway once described bankruptcy as an experience that occurs “two ways: gradually, then suddenly”. The economic response to the COVID-19 pandemic has followed this pattern. For weeks policymakers dithered, even as forecasts for the likely economic damage worsened. But in the space of just a few days the rich world has shifted decisively. Many governments are now on a war footing, promising massive state intervention and control over economic activity.

The new phrase on politicians’ lips is “whatever it takes”—a line borrowed from Mario Draghi, president of the European Central Bank (ECB) in 2011-19. He used it in 2012 to convince investors he was serious about solving the euro-zone crisis, and prompted an economic recovery. Mr Draghi’s promise was radical enough. Politicians are now proposing something of a different magnitude: sweeping, structural changes to how their economies work.

There are unprecedented promises. On March 16th President Emmanuel Macron of France declared that “no company, whatever its size, will face the risk of bankruptcy” because of the virus. Germany pledged unlimited cash to businesses hit by it. Japan passed a hastily compiled spending package in February, but on March 10th supplemented it with another one that included over ¥430bn ($4bn) in spending and almost four times as much in cheap lending. Britain has said it will lend over £300bn (15% of GDP) to firms. America may enact a fiscal package worth well over $1trn (5% of GDP). The most conservative estimates of the total extra fiscal stimulus announced thus far put it at 2% of global GDP, more than was shoveled out in response to the global financial crisis of 2007-09.

That sinking feeling

In part this radical action is motivated by the realization that the Corona virus, first and foremost a public-health emergency, is also an economic one. The jaw-dropping bad economic data coming out of China hint at what could be in store for the rest of the world. In the first two months of 2020 all major indicators were deeply negative: industrial production fell by 13.5% year-on-year, retail sales by 20.5% and fixed-asset investment by 24.5%. GDP may have declined by as much as 10% year-on-year in the first quarter of 2020. The last time China reported an economic contraction was more than four decades ago, at the end of the Cultural Revolution.

Grim numbers are starting to pile up elsewhere, not so much in the official statistics, which take time to be published, as in “real-time” economic data produced by the private sector. Across the world, attendance at restaurants has fallen by half, according to OpenTable, a booking platform. International-passenger arrivals at the five biggest American airports are down by at least 30%. Box-office receipts have crumpled (see chart 2).

The disruption to international travel will hurt trade, since over half of global air freight is carried in the bellies of passenger planes. The combination of disrupted supply chains and depressed demand from shoppers should hit trade far harder than overall GDP, if the experience of the last financial crisis is anything to go by. Already, the American Association of Port Authorities, an alliance of the ports of Canada, the Caribbean, Latin America and the United States, has warned that cargo volumes during the first quarter of 2020 could be down by 20% or more from a year earlier.

Official data are now starting to drip out. The Empire manufacturing index, a monthly survey covering New York state, in March saw its steepest drop on record, and the lowest level since 2009. In February Norway’s jobless rate was 2.3%; by March 17th it was 5.3%. State-level numbers from America suggest that unemployment there has been surging in recent days.

All this is fueling grim forecasts. In a report on March 17th Morgan Stanley, a bank, estimated that GDP in the euro area will fall by an astonishing 12% year-on-year in the second quarter of the year. The Japanese economy is forecast to contract by 2% this quarter and 2% next. Most analysts see global GDP shrinking in the first half of the year, with barely any growth over 2020 as a whole—the worst performance since the financial crisis of 2007-09.

Even that is likely to prove optimistic. On March 17th analysts at Goldman Sachs noted that they had “not yet built a full lock down scenario” into their forecasts for advanced economies outside Europe. Forecasts for America, which is at an earlier stage than Europe and Asia when it comes to the outbreak, remain Panglossian; very slow growth in China and a big recession in Europe could by itself be enough to send the world’s largest economy the same way. Steven Mnuchin, America’s treasury secretary, warned this week that the country’s unemployment rate could reach 20% unless Congress passes a stimulus package. A negotiating ploy? With shopping malls emptying, factories grinding to a halt and financial markets buckling, lawmakers may be loath to challenge the claim.

Despite stomach-churning declines in GDP in the first half of this year, and especially the second quarter, most forecasters assume that the situation will return to normal in the second half of the year, with growth accelerating in 2021 as people make up for lost time. That judgment is in part informed by China’s experience. More than 90% of its big industrial firms are officially back in business. Its stock market had been one of the world’s worst performers in early February but is now the best (or rather, least bad). There remains, however, a risk that global containment and suppression of the virus will need to continue for a year or longer. If so, global economic output could be dragged down for much longer than most people expect.

Perhaps the greatest lesson of the global financial crisis was that it paid to act decisively and to act big, convincing markets and households that policymakers were serious about countering the slump. If done right, central banks and governments can end up doing a lot less than they actually promised. A pledge to bail out banks makes it less likely savers will withdraw deposits and make a rescue necessary.

This time around, central banks sprang into action. Since February the Federal Reserve has cut interest rates by 1.5 percentage points. Other central banks have followed suit. Further deep rate cuts are not possible, though; interest rates were very low long before the virus began to spread.

Let’s get fiscal

Not all central banks are acting as boldly as they can. China has room to cut interest rates—its benchmark rate is 1.5%—but has held back in part because inflation is quite high (largely as a result of African swine fever, which hit pig stocks, raising prices). Central banks could try more creative policies. On March 19th the ECB’s governing council agreed to launch a €750bn bond-buying program, covering both sovereign and corporate debt. But the real action is now taking place on the fiscal front.

Governments are falling over each other to offer bigger and better stimulus packages. All countries are spending more on health care, both in an effort to find vaccines and cures and to increase hospital capacity. However, the bulk of the extra spending is on companies and people.

Take companies first. China, where the outbreak has slowed, is now trying to get people out and buying things. Foshan, a city in Guangdong province, has launched a subsidy program for people buying cars. Some cities have started giving out coupons that can be spent in local shops and restaurants. Nanjing this month gave out e-vouchers worth 318m yuan ($45m).

Most countries, however, are in or about to enter the worst part of the outbreak. As customers dry up, many firms will go bust without government help. Calculations by The Economist suggest that 40% of consumer spending in advanced economies is vulnerable to people shunning social situations. Firms in leisure and hospitality are especially rattled. The Moor of Rannoch hotel, in about as rural a part of Scotland as it is possible to find, says its insurer will not be paying out a penny for lost custom, since COVID-19 is a new disease and thus not covered under its policy.

One approach is to reduce firms’ fixed costs, largely rent and labor. China’s finance ministry will exempt companies from making social-security contributions for up to five months. The government has also temporarily cut the electricity price for most companies by 5% and enacted short-term value-added-tax cuts. The British government has extended a one-year business-rates holiday to all companies operating in the retail, hospitality and leisure sectors. Yet for many firms, no matter how much the government helps them reduce costs, revenues are likely to fall further.

So, measures may be needed to allow firms to maintain cash flow. Many banks are offering hefty overdrafts to tide corporate clients over. To encourage banks to keep lending, Britain has promised them cheap funding and state guarantees against losses. For very small firms, many of which do not borrow at all, it is offering non-repayable cash grants of up to £25,000.

Other countries are enacting similar plans. The Japanese government is helping small firms by mobilizing its state-owned lenders to provide up to ¥1.6trn of emergency loans, much of it free of interest and collateral requirements. Small firms qualify for help if their monthly sales fall at least 15% below a normal month’s takings. Bavaria, a rich state in Germany, announced on March 16th that small and medium-sized companies with up to 250 employees could receive an immediate cash injection of between €5,000 and €30,000. The European Commission has already relaxed state-aid rules so that governments can channel help to ailing companies.

The second part of the fiscal response is about helping people, and in particular protecting them from being made unemployed or suffering a drastic drop in income if that does happen. Ugo Gentilini of the World Bank counts more than 25 countries that are using cash transfers as part of their economic response to the virus. Brazil will give informal workers, who make up roughly 40% of the labor force, 200 Reais ($38) each. Small businesses will be allowed to delay tax payments and pensioners will get year-end benefits early. Australia is instituting a one-time cash payment of A$750 ($434) to pensioners, veterans and people on low incomes.

Northern Europe has led the way on implementing policies that make it less likely firms lay off workers. Germany has relaxed the criteria for Kurzarbeit (“short-time work”), under which the state pays 60-67% of the forgone wages of employees whose hours are reduced by struggling firms. Applications are going “through the roof”, according to the federal labor agency. The use of Kurzarbeit probably halved the rise in unemployment during the recession of 2008-09. More firms are now eligible to use it, temporary workers are covered, and the government will also reimburse the social-security contributions companies make on behalf of affected workers.

Bringing home, the Danish bacon

In Denmark firms that risk losing 30% or more of their workforce will see the government pay 75% of the wages of employees who would otherwise be laid off, until June. Norway’s government has beefed up unemployment benefits, guaranteeing laid-off workers the equivalent of their full salary for the first 20 days. Freelancers whose work vanishes for more than a fortnight will get payments equivalent to 80% of their previous average income. In Sweden the state will cover half of the income of workers who have been let go, with employers asked to cover most of the rest.

So far America has passed more modest legislation. Federal funding for Medicaid, which provides health care for the poor, is likely to boost spending by about $30bn, assuming it remains in place until the end of December, reckons Oxford Economics, a consultancy. America also has a new paid-sick-leave policy for some 30m workers, including 10m who are self-employed, worth just over $100bn. But in that regard America is merely catching up with other rich countries, which have far more generous sick-leave policies. America also has fewer automatic economic stabilizers, such as generous unemployment insurance, than most other rich countries. As a result, its discretionary fiscal boost needs to be especially large to make a difference.

It might be. The Trump administration’s plan to funnel money directly to households, if approved by Congress, is the most significant policy. It bears some resemblance to a scheme that was introduced in February in Hong Kong, in which the government offered HK$10,000 ($1,290) directly to every permanent resident. Mr. Mnuchin is thought to favor a check of $1,000 per American—roughly equal to one week’s average wages for a private-sector worker—with the possibility of a second check later. Some $500bn-worth of direct payments could soon be in the post.

Some economists are leery about such a policy. For one thing, it would do little to prevent employers from letting people go, unlike the plans in northern Europe. Another potential problem, judging by Hong Kong’s experience, is administration of the plan: the territory’s finance secretary hopes to make the first payments in “late summer”, far too far away for people who lost work last week. Mr. Mnuchin promises that payments will happen much sooner.

Checkered past

America has done something similar before, with results that were not entirely encouraging. The government sent out checks in both 2001 and 2008 to head off a slowdown. The evidence suggests that people saved a large chunk of it. The psychological reassurance of a bit of extra cash could be significant for many Americans, but the sums involved are not especially impressive. Bernie Sanders, a Democratic presidential contender, is not known for his smart economic policy making, but his suggestion of $2,000 per household per month until the crisis is over is probably closer to what is required.

Indeed, more fiscal stimulus will be needed across the world, especially if measures to contain the spread of the virus fall short. After the Japanese government passes the budget for next fiscal year at the end of this month, it can begin work on a supplementary budget that takes the virus into full account. Britain’s Parliament has given Rishi Sunak, the chancellor of the exchequer, carte blanche to offer whatever support he deems necessary, without limit.

How much further can fiscal policy realistically go? Last year the 35-odd rich countries tracked by the IMF ran combined fiscal deficits of $1.5trn (2.9% of GDP). On the not-unrealistic assumption that the average deficit rose by five percentage points of GDP, total rich-country borrowing would rise to over $4trn this year. Investors have to be willing to finance that splurge. The yield on ten-year Treasury bonds, which had fallen as low as 0.5% as fears of the virus took hold and traders sought havens, has recently risen above 1%. This is probably due to firms and investors selling even their safest assets to raise cash, but might reflect some anxiety over the scale of planned government borrowing.

Jesse Watters began “Waters’ World” on Saturday by delivering a message of positivity to his audience, saying he’s sure America can overcome the devastation from the coronovirus. “The United States of America is rolling into a recession or a depression. What we do now will determine which one it’ll be. First, we have to stop the spread. You know what to do. Wash your hands, stay clean and practice social distancing,” Watters said, reminding people of the guidelines given to keep people safe from exposure to the virus.

“If you can stay inside this week, work from home if you can. Don’t fly if you don’t have to. The virus is mostly in 10 large counties. A very high percentage in New York, California and Washington state,” he continued. “Some of these areas recognize the threat and are shutting down everything. All of them need to do that.”

Watters talked about where the country stands medically and scientifically, assuring people the “brightest” are on the case. “All the brightest scientists in America [are] working around the clock to find a vaccine. Our people are the most innovative in the world,” Watters said.

The host also addressed the president’s leadership, urging him and American industry leaders to do whatever they can. “The president should be invoking every possible law and power available to him. He should be mobilizing the military and declaring war on the coronavirus. Rally the country around the mantra ‘made in America,'” Watters said. “Every American industry should have all hands-on deck. This isn’t a time for weakness. This is a time for strength.”

“Our country’s fighting an invisible enemy within our borders,” Watters added. “We’ll dull the spike and kill it if we all work together.” Watters expressed his optimism toward an American rebound. “We’ve had to come together by staying apart. I know one thing for sure, we’ll stop it and we’ll kill it and we’ll be a better country for it. Tough times are ahead,” Watters said. “The American character shining bright, loving our families and our neighbors and working nonstop to save lives. It’s now in your hands. We have a great spirit and we shall overcome.”

Italy reported a second successive drop in daily deaths and infections from a coronavirus that has nevertheless claimed more than 6,000 lives in a month.The Mediterranean country has now seen its daily fatalities come down from a world record 793 on Saturday to 651 on Sunday and 601 on Monday.

The number of new declared infections fell from 6,557 on Saturday to 4,789 on Monday. The top medical officer for Milan’s devastated Lombardy region appeared on television smiling for the first time in many weeks. “We cannot declare victory just yet,” Giuglio Gallera said. “But there is light at the end of the tunnel.”