What We Are Facing

The US has 3,000 reported cases of the novel coronavirus COVID-19 as of this writing. The number has been doubling every two days. If the virus continues to spread at this rate, in two weeks, the number of reported cases in the US will reach 400,000. That’s five times the reported number of cases in China.

China slowed the spread of the virus with massive action. They built an entire functioning hospital in seven days. They checked temperatures door to door. When they found a person with an elevated temperature, they took them to staging areas in stadiums and conference centers where they went through multiple tests. The US does not have similar infrastructure in place, nor is there any possibility of developing it quickly.

Social distancing is the primary tool that the US available at this point. It is critically important to keep people separated for the next few months in order to limit the number of infections that occur at any given time. While this approach should have a positive effect on public health, the economic impacts will be devastating.

Airlines, cruise lines, and hotel chains will receive government bailouts. These industries are in for some rough times, but the stronger players will survive. 

Small businesses with limited cash flow will face much more sever challenges. The bill that the House of Representatives passed on Friday is designed to help small businesses, but it’s unclear how promptly this can be implemented.

The real crisis is going to hit workers in the service economy. When stores and restaurants close, when hotels no longer need people to cook and clean because no one is traveling, when the demand for ride sharing and food delivery dries up, millions of workers are going to find themselves without income. These folks do not have financial reserves; they were barely getting by when they had two or three jobs to go to. If they are still expected to come up with monthly payments for rent, insurance, auto loans, and credit care payments, they are going to be desperate to say the least. 

How will the social order be maintained when millions of citizens suddenly become desperate for money? Will they band into gangs of thieves who hijack shoppers in grocery store parking lots? The House bill attempts to provide relief for hourly workers, but the administration of this relief is going to be a massive challenge, and it can’t last indefinitely.

It’s likely that society will not return to normal for at least a year, when vaccines and treatments finally become available. Expect massive amounts of chaos and suffering in the interim.