Economic pain will persist for US economy long after coronavirus lockdowns end

WASHINGTON - Walter Isenberg is the sort of business owner US President Donald Trump has in mind when he talks about the need to start lifting coronavirus lockdowns and reopen the American economy. Isenberg's hotel and restaurant group in Denver has seen its revenues drop from US$3 million a day last year to US$40,000 a day now.

Trump is in a rush to lift quarantines and stay-at-home restrictions that have brought an 11-year economic expansion to an abrupt end and knocked millions of people out of work. The president has predicted that once the economy restarts, it will rocket itself out of a deep recession and lead to an economic boom"perhaps like never before."

Data shows that unemployment claims rose and restaurant reservations vanished even before the lockdown orders hit, as nervous consumers retreated into their homes. And they show consumers are unlikely to return to airports, restaurants and sporting venues en masse any time soon. The president's desire to reopen the economy can be seen in the data: The crisis has already pushed more than 16 million people out of work in the past three weeks. Forecasters agree that a recession has already begun, with the only disagreement centered on how deep and painful it will ultimately be.

Uncertainty about the virus has slowed economic activity even in places without state or local restrictions on activity. Stay-at-home orders have not been evenly applied across America: Some states imposed them early, some imposed them later and some still have not imposed them at all. Yet all states have seen unemployment claims rise in recent weeks.

Exactly. The delusion that economic recovery will be quick no matter how far countries take their COVID-19 restrictions needs to be eradicated.

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