The current argument is about seemingly incompatible arguments: Should we “lockdown” society to help prevent the spread of COVID-19 while destroying the economy, or should we “open up” to reduce economic hardship while encouraging the spread of disease and death?

The belief seems to be that we can’t do both, that is, we can’t prevent the spread of COVID-19 and simultaneously reduce economic hardship.

We can’t have our cake and eat it, too.

I claim this belief not only is wrong, but it actually causes both the disease and economic hardship.

Currently, it seems we can’t have our cake, and we can’t eat it, either.

The burden of proof lies with economic lockdown proponents
By Heather MacDonald, the Thomas W. Smith fellow at the Manhattan Institute, and contributing editor at City Journal — 05/07/20

Who has the burden of proof regarding the economic lockdowns: Those who argue for continuing them or those who want to lift them?

In litigation, allocation of the burden of proof often determines the outcome of a case.

If the advocates of continued lockdown had that burden, they would have to answer the following questions, now kept off stage:

—What have the lockdowns accomplished so far and what will they accomplish in the future?
—What are the public health consequences of a global depression?
—Do the benefits of keeping people from working outweigh the costs in lost and stunted lives?
—How will herd immunity be achieved under lockdown conditions?

Sweden has been as successful in controlling the virus as most other nations, though its businesses remain open; its death rate is lower than those of the most hard-hit U.S. states that locked down relatively early.

Laos and Cambodia practiced no social distancing but have had no outbreaks. An analysis published in The Wall Street Journal found no statistically significant connection between the rapidity with which a state in the U.S. shut down its economy and its subsequent death rates.

On Wednesday, Cuomo announced the “shocking” news that 84 percent of all hospital admissions were either people sheltering at home or nursing home residents.

He shouldn’t have been surprised. The risk of coronavirus infection occurs overwhelmingly indoors.

Researchers in China identified only one outdoor outbreak of infection among over a thousand cases studied. Most transmissions occurred at home, rendering the close-down-all-businesses-and-shelter-in-place rule contraindicated.

Reading the above argument might tempt one to believe that lockdowns not only are useless, but actually harmful, not only to the economy, but also harmful to human health — and that lockdowns actually cause COVID-19 to proliferate.

But then there’s this:

Brazil is letting the coronavirus run wild with little intervention, and the results are strikingly bad
Business Insider, Kelly McLaughlin, May 1, 2020 

Brazil is facing an extreme surge in COVID-19 cases after the government left the virus to spread virtually uncontrolled for weeks, all while the country’s president mocked stay-at-home policies and pushed against directives from the World Health Organization.

As of Friday evening, Brazil, which has a population of 209 million, had 91,589 confirmed cases of COVID-19 and 6,329 deaths from the virus, according to Johns Hopkins data. That makes the country’s per-capita death rate 3.02 deaths per 100,000 people.

Experts told The Associated Press that the numbers of cases and deaths could be much higher because Brazil does not yet have widespread testing.

And this:

Sweden’s coronavirus results don’t make the case for reopening the American economy
By James Pethokoukis, Editor, AEIdeas; DeWitt Wallace Fellow, April 7, 2020

Skeptics of America’s (mostly) national lockdown say Sweden’s lighter-touch approach is far superior. 

Unlike many other advanced economies, the Swedish government has not imposed a strict quarantine on its population.

As I write this, Sweden has reported 7,693 total cases and 591 deaths. Its fatality rate per capita is higher than in the United States or any other Scandinavian country.

And while Sweden’s total cases per million residents (762) are fewer than Nordic neighbors Norway (1089) and Denmark (875), they are more than Finland (417). Sweden has also conducted fewer tests per million than those other nations.

Switzerland, which is on a tight lockdown and so far has more than three times as many cases per million and nearly twice as many deaths (as Sweden).

(But),  Switzerland’s population density is pretty much the same as neighbor Italy’s, also a high outbreak country, and 10 times as high as Sweden’s.

Moreover, Sweden has one of the highest shares of one-person households in the world (24 percent), far higher than Norway (19 percent), Denmark (17 percent), Finland (15 percent), and Switzerland (14 percent). Perhaps this helps prevent the virus from spreading. 

The economic impact of the Swedish strategy is also unclear. The government certainly thinks it’s going to be pretty bad.

According to the National Institute of Economic Research, its baseline scenario has Swedish real GDP growth declining by 3.4 percent this year, worse than its 2.9 percent forecast for the United States.

I always caution against mindlessly extrapolating what works in Scandinavia to also be successful in the US. 

So both Sweden’s lack of lockdown and America’s (mostly) lockdown fail to prevent death and disease and fail to protect their economies. By any reasonable measure, neither system can be considered a success.

If it’s not either/or with regard to lockdown, what is it?

Consider this article:

Schools Risk Drowning in Red Ink
By Max Eden, Manhattan Institute, May 08, 2020

Schools are funded by a combination of local, state, and federal dollars.

In an effort to decrease financial inequities across school districts of disparate means, state policymakers in the last decade substantially increased the share of school funding that comes from state income and sales taxes.

With unemployment clams at 22 million and rising, retail sales currently illegal, and a major recession on the horizon, school districts are going to take a shellacking.

Schools will have to get creative and aggressive in order to balance their books. Secretary of Education Betsy DeVos could look to perhaps the best speech given by her Obama-era predecessor, Arne Duncan.

He warned that the cushion of the stimulus act would soon be running out, and that states and districts were about to face a “funding cliff.”

Duncan urged school leaders to resist the temptation to lay off teachers and eliminate arts programs. Rather, he insisted that they look to reduce administrative costs.

He noted that school districts paid about $8 billion each year in bonuses for teachers with masters’ degrees, despite little evidence that they provide any benefit to students. 

Unfortunately, despite his own advice against “reform by addition,” Duncan’s tenure was defined by his “Race to the Top” initiative, which foisted the Common Core and test-based teacher evaluation on the states.

From 1992 to 2009, teaching staff increased by 32 percent, whereas administrative staff increased by 46 percent.

During the great recession, teachers got the short end of the stick, with 3.7 percent losing their jobs compared to 2.2 percent of administrative staff.

Aside from favoring teachers over administrators, there is plenty of other school spending that is either unproductive or even counter-productive.

[“Restorative justice,” “professional development,” and “pre-k” programs are given as examples.]

Education in America is largely funded by the monetarily non-sovereign state and local governments, which do not have the federal government’s unlimited ability to create dollars and to fund everything.

Unquestionably, lockdowns injure the economy and today’s young generation, educationally, emotionally, and financially.

But do we want our children to sicken and die?

Finally, we have this article, which at first glance may not seem to be related to the “lockdown/no lockdown” argument, but in reality is central to it.

New Bill Would Give Americans $2,000 Per Month Until Coronavirus Pandemic Is Over
HuffPost Igor Bobic, May 8, 2020
A new bill seeks to dramatically increase financial relief for struggling American families amid the ongoing coronavirus pandemic by extending the government’s stimulus checks months after the crisis is over.

The Monthly Economic Crisis Support Act, introduced Friday by Sens. Kamala Harris (D-Calif.), Bernie Sanders (I-Vt.) and Ed Markey (D-Mass.), would provide a monthly $2,000 check to every person with an income below $120,000 throughout the public health crisis and for three months after it officially ends.

In late March, the Senate passed a $2 trillion package called the Coronavirus Aid, Relief, and Economic Security Act, but the trio of progressive senators believes it’s insufficient.

“The CARES Act gave Americans an important one-time payment, but it’s clear that wasn’t nearly enough to meet the needs of this historic crisis,” Harris said in a statement.

“Bills will continue to come in every single month during the pandemic and so should help from the government.”

The plan stands a poor chance of passage in the Republican-controlled Senate, which has soured on spending.

But with more than 30 million people unemployed over the last seven weeks and no end to the pandemic in sight, Democrats are aiming to up the pressure on congressional leaders as they begin discussions over another fiscal relief package that is expected sometime this month.

SUMMARY AND CONCLUSION

Much money, time, and effort is being expended to develop a cure and a human preventative (vaccination) for COVID-19.

Accomplishing either is felt to be many months off, and either or both may prove to be impossible.

And Congress is losing its desire to spend at just the moment when the economy needs more money, and a great deal of it.

Having neither the cure nor human preventative, the “lockdown” vs. “no lockdown” argument continues to rage.

With the President’s sole concern being his re-election, he is betting that the public is more concerned about money than lives, so he repeatedly urges the states to do what he tweets (in all caps), “LIBERATE.”

This argument really revolves around just two questions:

1. How best to prevent disease and death?
2. How best to preserve the economy and our way of life?

In a previous post, “The surprisingly simple way to open America in 14 days and avoid a depression,” we show that national mask usage would create a quasi “herd immunity,” in which neither a cure nor a vaccine is the primary goal.

Rather, the primary goal is to prevent the transmission of the disease. 

This goal, when accomplished, ultimately destroys the disease, with minimal negative economic effects.

When people wear masks, virus transmission among them is inhibited. And the masks don’t necessarily need to be of the N-95 type. Even simple cloth masks will do, if everyone wears them.

National mask usage is:

–Affordable (Our Monetarily Sovereign federal government can afford anything),
–Physically possible (easily and quickly produced with easily available materials), and
—Psychologically possible (a combination of legal requirements, disease fear, and social non-conformance stigmatizing would have a powerful motivational effect.)

Businesses, where mask usage is possible, should be allowed to open. There would be no reason to destroy them and their employees by forcing them to close.

“Wear the mask; do the task.”

Additionally, for businesses where mask usage is not appropriate, i.e. restaurants, and entertainment activities where masks impede performance (sports, swimming, singing, some musical instruments, plays, and movies, etc.)  the government should be prepared to focus full financial support to the business owners and the employees.

And, of course, there are some people who, for health reasons, cannot wear masks. They should be allowed special privileges, just as the physically impaired have parking privileges.

Rather than illogically dragging its feet about supporting everyone (which the federal government actually could do, but resists), the government should produce, mandate, and distribute the masks, while financially supporting those who cannot use them.

Thus, with universal mask rules, the U.S. government can accomplish everything it wishes — disease prevention and economic growth — even without ever finding a cure or a vaccine, and without closing the vast majority of American enterprises.

And of course, implementing the Ten Steps to Prosperity would assure economic growth and a more equitable distribution of wealth, income and power.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

1. Monetary Sovereignty describes money creation and destruction.
2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY