Last updated on 2020-11-13
Dr. Michael Osterholm directs the Center for Infectious Disease Research and Policy at the University of Minnesota. Neel Kashkari presides over the Minneapolis Federal Reserve. Respectively, these two men have more knowledge of public health and economics than everyone who has ever appeared at a Kristi Noem press conference in Pierre.
In an August 7 New York Times op-ed, Dr. Osterholm and Kashkari say “testing, contact tracing, case isolation, and extensive monitoring of positive tests” are enough to control the spread of coronavirus, but only if we can drive the daily rate of new cases below one per 100,000 people per day. The United States was at 14.6 new cases per 100,000 people yesterday. South Dakota was at 14.5. Minnesota was at 14.3.
To get the daily rate of new cases down to the point where public health interventions can manage the pandemic, Dr. Osterholm and Kashkari say we need a nationwide lockdown:
To successfully drive down our case rate to less than one per 100,000 people per day, we should mandate sheltering in place for everyone but the truly essential workers. By that, we mean people must stay at home and leave only for essential reasons: food shopping and visits to doctors and pharmacies while wearing masks and washing hands frequently. According to the Economic Policy Institute, 39 percent of workers in the United States are in essential categories. The problem with the March-to-May lockdown was that it was not uniformly stringent across the country. For example, Minnesota deemed 78 percent of its workers essential. To be effective, the lockdown has to be as comprehensive and strict as possible.
…If we do this aggressively, the testing and tracing capacity we’ve built will support reopening the economy as other countries have done, allow children to go back to school and citizens to vote in person in November. All of this will lead to a stronger, faster economic recovery, moving people from unemployment to work [Dr. Michael T. Osterhold and Neel Kashkari, “Here’s How to Crush the Virus Until Vaccines Arrive,” New York Times, 2020.08.07].
Having that many people go without paychecks for six weeks requires the government to to issue a lot of checks to keep food in people’s fridges and people in their homes. Even if Donald Trump had delivered on his promise to get control of the federal debt, the magnitude of this crisis would require enormous deficit spending. But Kashkari says we don’t have to seat this red ink:
Well one of the things that has happened in this recession that is unlike any recession in modern times, our savings rate has taken off. It’s really curious. Those of us, like me, who have been able to keep our jobs, we’re actually saving more money because we’re not going out to restaurants or movies or on vacations. So the personal savings rates soared from about 8% to 20%.
The way it works is that money then gets put in the bank, or put into a money market fund, and those resources are available so that when the government runs deficits, it doesn’t have to borrow as much from abroad because we’re generating savings domestically. It is much safer for a country to fund its own government deficits from its own people than it is to borrow from abroad.
So it turns out, we can actually fund the additional unemployment benefits, for example, or additional support to small businesses from our own domestic resources. That is much, much better than having to borrow it from abroad. So this recession is very unique in how we’ve shut down part of the economy because it’s also generating savings that can support the workers who are most affected. I know it’s complicated, but this is a unique moment when the traditional concerns about government deficits, debt to GDP, do not apply [Neel Kashkari, in Leila Fadel and Christianna Silva, “A National Lockdown Could Be the Economy’s Best Hope, Says Minneapolis Fed President,” NPR, 2020.08.09].
“Take your medicine now,” says Dr. Osterholm. Skip the bar, the bumper cars, the restaurant, the Rally. Stay home, send your workers home, tell your Congresspeople to quit dawdling and send checks.
The GOP just can’t get rid of the idea that trickle-down economics works, primarily because they not only want it to work, but they NEED it to work to keep themselves and their donors with full pockets. The idea of giving the tired, poor, hungry, etc., money to spend on food, rent, clothing, and other necessities – and thus financing farmers, distribution centers, landlords, factories, etc. – never occurs to them at all.