COVID-19 and the U.S.: What lies ahead

Six concrete steps the U.S. federal government ought to mandate right now to protect people’s economic livelihood

Published April 4, 2020 12:30PM (EDT)

A woman wears a medical mask on the subway as New York City confronts the coronavirus outbreak on March 11, 2020 in New York City. President Donald Trump announced on Wednesday evening that he is restricting passenger travel from 26 European nations to the U.S. in an effort to contain the coronavirus which is rapidly spreading throughout the world and America. (Spencer Platt/Getty Images)
A woman wears a medical mask on the subway as New York City confronts the coronavirus outbreak on March 11, 2020 in New York City. President Donald Trump announced on Wednesday evening that he is restricting passenger travel from 26 European nations to the U.S. in an effort to contain the coronavirus which is rapidly spreading throughout the world and America. (Spencer Platt/Getty Images)

This article originally appeared on The Globalist.

Contrary to the pronouncements by the Trump Administration, the COVID 19 crisis will not be over in May, not even close. 

Let´s be realistic

It is far more realistic to plan on 5-6 months of very, very restricted public life. That means no open restaurants, no non-essential business, no schools during that time period. 

And, owing to the incredible gaps in the U.S. health care and health insurance systems, the loss of life may reach approximately two million by September in the United States alone.

In the second quarter, the U.S. economy will contract by at least 12% on a quarterly basis. 12%! In the third quarter, that number might reach a collapse of 30%.

Unemployment will reach 30-40%. Not even in the 1930s did the United States experience such a situation (it peaked at 25%). We will see massive corporate and personal bankruptcies in June. They will be higher than anything we have ever experienced. No CARES Act will cure this.

Federal government mismanagement

The U.S. federal government has mismanaged this from the beginning. From failing to identify this threat in the first place (intelligence briefings were completely disregarded). 

Of course, President Trump — although now doing almost daily press conferences — was still in full denial mode back then. He stuck to calling the virus the new Democratic hoax for an amazingly long time. 

Never one to admit a mistake, Trump is very eager to point out to this very day that it was Democratic governors´ laxness that led to the rapid spreading of the virus.

Given that, it won´t surprise anyone that the Trump administration is making its aid measures selectively available — to Republican-led states first and rapidly, to Democratic-led states only reluctantly. 

Even now, the Trumpistas are apparently more devoted to operating in full-blown election campaign — not virus fighting. 

While I don't want to talk politics, it is important to point this out. The accelerating gravity of the situation is a direct outcome of this incompetence and the immense politicization of the aid process.

A true "CARES" Act?

Now, let us talk about the $2.2 trillion CARES Act. Cute semantics aside, the Coronavirus Aid, Relief, and Economic Security Act (CARES), which includes a provision to hand out $1,200 to qualifying individuals, will do very little for the middle class, especially in "blue" (i.e., Democratic-led) states where living costs are higher. 

If that's the safety net, the United States plans to span for its people, it is in serious threat of failing as a society and economy. 

The actions that could prevent this from turning into a financial disaster are very different: 

1. A federally mandated moratorium of all tax payments at the federal, state and local level. 

2. All losses of federal, state and local government revenue and all additional expenditures due to the virus should be backstopped by the U.S. Federal Reserve. 

Once the situation normalizes, revenues recover and expenditures fall, the Fed would be repaid. 

3. A moratorium on all mortgage and rental payments. Mortgage companies may put liens on related properties. Both mortgage companies and landlords receive tax credits for their loss of income from the federal government. 

4. All evictions — virus related or not — are stopped until further notice. 

This is in order to protect the innocent from being tossed out of their homes, but it is also a public health issue. 

5. All loans to large corporates, and SMEs are mandatorily linked to them maintaining their full workforce during this crisis. 

6. Medicare for all until December 31. With unemployment numbers possibly reaching 40%, the massive loss of health insurance benefits that are usually employment-related in the United States must be prevented. 

This matters all the more as the currently legally mandated right of laid-off workers to maintain employee-sponsored health insurance by paying the full premium will be unaffordable to workers given the loss of income. 

A CARES-less Act

These are some of many things that should be done. The new CARES law does not appear to address any of them. For the most part, it tries to address the economic issues as if it were a normal, but deep recession. 

But this is a national (global) health emergency that is like nothing we have seen before. Already, it has led to a crash in the U.S. economy in a way that we also have not seen before.

Restructuring into a (health) war economy

For the next 5-6 months, what remains of the U.S. economy must be completely restructured into a war economy. We don't need new cars, we need ventilators. We do not need new furniture, we need hospital beds. Again, the list is long.

Some of that has been started, but much more needs to be done. This reorganization cannot be left to the states or communities. It needs to be federally mandated. 

In this emergency, we cannot just rely on the National Guard. We must fully mobilize our military and reservists to step in in order to fill the gaps of critical personnel that we need to beat this.

Mobilization ahead

What does that mean? Workers in factories that make ventilators will fall sick themselves. Healthcare workers, the same. Grocery clerks, ditto. Already two Trader Joe's grocery stores had to close in New York City. 17% of New York City's police officers are sick, most with the virus. 

These COVID 19 infection-related supply gaps will multiply exponentially over the next few months. We must fill them as best as we can, hence the mobilization. 

This mobilization is also to avoid the complete collapse of our supply chains for critical goods, but especially food delivery and distribution at grocery stores. On March 31, workers at Amazon and Whole Foods walked out in protest over a dispute over pay, paid sick leave and working conditions during the COVID 19 outbreak. 

The vaccine route may not be fast enough

It goes without saying that we need to quickly develop a vaccine as well as a cure. Researchers all over the world are hard at work on these matters, but we all know that the timeframe is beyond what we might be able to bear. 

It should be crystal clear to the inventors of an eventual vaccine or cure, far beyond being awarded the Nobel Prize for Medicine, that these medicines will be mass produced and globally distributed for free! 

Costs will be borne — at cost — by global governments. No nationalism, no price-gouging, no patents! Jonas Salk is the role model! When asked who owned the patent of the polio vaccine Salk invented, he responded: "Well, the people I would say. There is no patent. Could you patent the sun?" 

Let's not get fooled!

Time is of the essence, because even if the virus responds to rising temperatures (meaning recedes), it will come back once temperatures fall and probably will have mutated. 

By the same token, we should not bet on the fact that COVID 19 follows the flu in this regard. We have no evidence to support this. 

The fact alone that it spread in Brazil and other countries in the Southern Hemisphere during their summer, speaks against the likelihood that it will recede during our (Northern) summer.

Human and political tolls

In addition, the psychological toll of being confined to our homes without (or little) human contact should not be underestimated. 

Already, the United States has the highest suicide rate per capita in advanced countries because of the free availability of guns. Suicide rates will go through the roof. 

This will also affect the politicians. Just for illustration, the other day, the much-admired minister of finance of the German state of Hesse, widely considered the state's next governor, killed himself.

He was apparently unable to operate under this burden, although Germany, to date, is one of the few countries that appears to manage the crisis fairly successfully (things can always change, we know). 

About 200 million Americans will be infected

We should all expect that about 200 million Americans will be infected by the virus by the end of the year. 

However, according to the medical information we have, even that might only keep these 200 million people immune from reinfection or infecting others (if they don't die) for 1-2 years. 

The Spanish Flu will likely be considered mild

This is the most tragic situation mankind has probably ever seen. The Spanish Flu will likely be considered mild, once the history of this virus is written. 

This is also no 9/11 event

9/11 was certainly a major shock, especially in the United States. 9/11 also led to restrictions on our lives we had not seen in our democracy. 

But the global economy was not seriously hollowed out, never mind destroyed. Even the directly affected U.S. economy only suffered a mild recession. 9/11 was a localized event that frightened us and kept us scarred for life, but it was fundamentally different from COVID 19.


Nobody should expect this to go away quickly. And nobody should expect that this will not create destitution at an unimaginable scale. It will. 

Nobody is immune against the virus and nobody, and I mean nobody, not even billionaires, will be immune from the widespread poverty that will follow. 

We all should be prepared for a 2-3 year period during which we will live off close to nothing. 


This article is republished from The Globalist: On a daily basis, we rethink globalization and how the world really hangs together.  Thought-provoking cross-country comparisons and insights from contributors from all continents. Exploring what unites and what divides us in politics and culture. Follow us on Facebook and Twitter.  And sign up for our highlights email here.

By Uwe Bott


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