New @politico op-ed by @stevenberry + me. We argue that Congress is grossly underfunding efforts to combat Covid-19 & that White House's wish it away strategy won't work. We need humility - we don't know what will work, so we should fund redundant programs politico.com/news/agenda/20…
Less than 8 percent of the trillions in funding that Congress has allocated so far in response to the virus has been for solutions that would shorten or mitigate the virus itself: increasing the supply of PPE, expanding testing, developing treatments, vaccine development.
In the face of competing proposals, our suggestion is to do all of them. Nobody knows what will work best, or work at all, or in what time frame. Our relative inaction seems predicated on the idea that we will have an effective vaccine in 12 months. What if it takes three years?
Spending a half-trillion dollars to fund Covid-19 infrastructure seems preposterous until you compare it to the scale of the devastation we’re incurring. As @austan_goolsbee has said, the first rule of pandemic economics is to fight the virus.
We don't know with certainty that we'll be able to develop a successful vaccine. As a result, we should be funding x-prizes for the development of treatments that lower the severity of Covid infections.
Some proposals call for widespread testing without much need for contact tracing. This will work if new technology for cheap and easy tests can rapidly scale, which some doubt is possible. Others call for fewer tests paired with mass contact tracing and isolation. Try both
Dramatically increasing Covid funding is cost effective. For example, even if half a $trillion in Covid-19 spending had a 30 percent chance of eliminating a potential second wave that could take 100,000 lives and necessitate another month of lockdown, it would be cost effective.
If a half-trillion in Covid-19 spending produced just a 5% increase in GDP over the next 12 months (GDP is currently contracted by over 20 percent), pure GDP gains would yield a benefit-to-cost ratio of over 2:1 — before factoring the value of the deaths averted.
.@Ivanwerning has a useful analogy. Imagine we found out that in 4 months, an asteroid was going to hit the Earth. News about the asteroid would set off financial calamity. However, to stop the asteroid, we'd need more than unemployment insurance or small-business loans
To fully address a crisis, you need to address the cause of the crisis, not just its economic fallout.
