Does it have to be this way? Why not put certain things like rent, utilities, mortgage payments on pause--even if just for those on furlough?
I realize those who are heavily leveraged may suffer, like airlines who bought back stocks instead of maintaining a war chest. And ultimately I agree that lockdown isn't practical in the long term.
Yes, pretty much.
I'm really struggling to deal with the odd economic intuition here in the comments section. I'd urge readers to start to think about how every bit of the economy is interconnected and that it just can't magically 'stop'.
"Alberta's premier, Jason Kenney, unveiled projections for the province's unemployment rate on pace to reach 25 per cent." [1] and this is in the short run!
Have a look at this jobless claims graph [2] - and it's already out of date.
Even if we could magically deal with massive reduction in GDP (maybe we can, but probably not) - the economy cannot realign itself quickly.
Such an adjustment would take decades to do organically. We have no ability to centrally re-allocate every aspect of the economy. We can do it in some parts of some of sectors - banking and finance for example (sometimes with mortgages), but even that is risky and very unfair.
It's not just 'airlines' - it's vast swaths of the economy, that take down other parts of the economy. At least travel, energy, tourism, hotels, restaurants, entertainment, most manufacturing - just to rhyme of a few are 'shut down'. That's a monster part of the economy.
" Why not put certain things like rent, utilities, mortgage payments on pause--even if just for those on furlough?"
Because everything is connected ... the money that goes to your rent, utilities, groceries, gas, it's not some magical place obviously. There are economic endpoints there, jobs, consumption, taxation - and a lot of them.
The banks employ millions of people doing lending. There are millions of people that act as landlords and who depend on that income. They're also mortgaged often. Utilities employ a lot of people, they also buy services.
And what about the people like my parents who don't rent and have no mortgage?
Consider the both the scale and timeline of the economic intervention right now: we are printing money and doling out literally Trillions of dollars (!!) very quickly, willy nilly. Unbelievable numbers. What this means is the government/central banks are realigning the economy temporarily and 'deciding arbitrarily and quickly' who is going to win and lose - and then putting off payment to taxpayers in the future - and this will last generations. This is happening on a global scale.
If that's not shocking enough - all of this is a temporary fix! All these massive bailouts won't last very long.
The various programs announced in Canada for example last about 4 months, but Covid will last probably 18-24 months.
Again: Contact tracing (with intervention) is not only a reasonable solution, it's basically the only current viable option to get going outside of a cure or vaccine.
[1] https://www.cbc.ca/news/business/jobs-unemployment-rate-covi...
[2] https://www.businessinsider.com/us-weekly-jobless-claims-rec...
Based on the rest of your comment, I am having trouble understanding how this statement is related. IMO the rest of your argument very clearly explains why the economy is interconnected; and could even be said to be an argument for the need to re-open the economy. However, it does not address how contact tracing would be a part of this. Is it your assumption that "if we implement contact tracing, then we can safely send people back to work, thus saving the economy"? If so, I think your argument would benefit from more explicitly contacting those dots.
But yes it could have been more clear, though I'm three comments deep here and it was in my original.
Korea and Taiwan really are the only countries to have contained Coronavirus without 'total lock-down' policies. Taiwan has eradicated it and now controls everyone coming to the island to make sure there are no new infections.
Korea uses the contact tracing approach.
As Western nations try to 'lift' the restrictions over the next few weeks, it does not bode well - there's no reason to believe Covid won't just bounce back. Nothing really has changed from several weeks ago before the lock-downs when there was 'social distancing' but Covid was still exploding.
Perhaps the weather is a little warmer, we have more testing capability, people are a little smarter ... but there's nothing on the policy front that indicates a new approach, we have not identified spread vectors or primary means of infection. We're just going back to 'basic social distancing' which didn't work well.
We need to look to Korea it's the only exemplary system and it relies on contact tracing.