I debated long and hard with myself regarding whether to tackle the very sensitive subject I will discuss below. I had decided not to write what follows. But [then] I changed my mind and decided to go ahead with it, controversial as it is, because whatever decision our leaders make just ahead on the coronavirus fight could have significant consequences for both the economy and our health.

Here’s the issue: In March, President Trump raised the idea of lifting most restrictions and reopening the economy as early as Easter, which this year is on April 12. Most epidemiologists, on the other hand, remain steadfast that it will likely be at least a couple more months before it will be safe to lift restrictions and free up the economy.

President Trump was lambasted by the mainstream media for even raising the issue of lifting economic sanctions and allowing many non-essential businesses to reopen by Easter. The media referred to him as “barbaric,” among other nasty things.  Trump’s argument was that the economic lockdown may throw the country into a depression if we don’t reopen relatively soon. He has a point.

Now, there is no question we do not want to reopen the economy too soon and run the risk that the coronavirus continues to accelerate. On the other hand, we don’t want to keep the lockdown in place any longer than is necessary. The question is, who will know when is the right time? I certainly don’t know the answer; I’m not sure anyone does.

As this debate heated up, some new information came to light. We all know the implications of lifting the coronavirus lockdown too soon – many more deaths. But what some analysts pointed out is that deaths will also increase, perhaps significantly, if the economy goes into a severe recession, or worse.

Again, I don’t have the answer, but I’ll summarize the key points on both sides, and I do so because of the critical economic consequences of whatever decision our leaders make. This may be a difficult letter to read, but I think we all need to know the facts. Let’s get to it.

A Severe Recession (Or Worse) Will Lead to More Deaths

Two of my favorite writers – Stephen Moore of the Heritage Foundation and Robert (Rob) Arnott, Chairman of Research Affiliates, a global investment firm – teamed up to write a compelling piece [in March] in which they argued that a severe recession will also lead to more U.S. deaths, just as ending the economic lockdown too early will do. Here is the gist of their (and others’) argument.

Moore and Arnott begin by asking a series of very difficult questions: “How much destruction to the economy are we willing to tolerate to save lives from the coronavirus? How many millions of businesses are we willing to allow to file for bankruptcy? How many millions of workers are we willing to become unemployed?” They readily admit such calculations are difficult to make because we do not know how many people the coronavirus will kill.

Next, the authors emphasize that the lockdown of the economy also carries its own health risks and unintended consequences. “You cannot crush the economy without having a significant degree of human misery and even deaths, not counting the loss in dollars of wealth and income.

You might wonder how a recession could increase health risks and deaths, but the research is clear. In recessions, especially severe ones, the unemployment rate goes up significantly. And higher unemployment unquestionably leads to increased health risk. For example, as the authors point out, research shows there is a direct link between rising unemployment rates and suicide.

The research suggests that if the unemployment rate rises by 5% just ahead, that would likely mean an additional 16,500 suicide deaths. If it rises by 10%, it could mean 30,000 more suicides. Meanwhile, a study by the National Survey of Drug Use and Health found that, during serious recessions, the rate of drug addiction roughly doubles among those unemployed versus those working full-time.

Here’s another example: Studies by the Archive of Internal Medicine found that heart attacks increased by 35% among unemployed Americans age 50 to 75 during serious recessions.

These statistics and similar others support the fact that recessions and rising unemployment contribute to higher death rates. In other words, the human toll will be very real from widespread job losses, business bankruptcies, etc., etc., that will increase the longer the shutdown continues.

As a final example, Moore and Arnott point to the fact that an estimated 120 million Americans (over one-third) suffer from cancer, heart disease, diabetes and chronic lung disease and require ongoing medications and periodic medical treatment. The authors point to research that concludes if just one in 1,000 of these people dies because they can’t get their medications, or hospitals are too full to take them in, that’s another 75,000 deaths.

We May Already Be in a Recession, But Don’t Know It Yet

The bottom line is that a serious contraction in the economy, which seems inevitable at this point, means that more and more Americans will become unemployed. [In the third week of March], a record 3.3 million Americans filed for new unemployment benefits. I see estimates that the unemployment rate will easily spike to 10% just ahead and even 20% before long.

Forecasts for the U.S. economy grow ever more dire each week. The economy grew by 2.1% in the fourth quarter of last year. Most forecasters, including the Federal Reserve Bank, expected GDP growth of at least 3% in the first quarter of this year. Not anymore! Because of the draconian actions taken in March and the shutdown in much of the economy, we’ll be lucky if the first quarter GDP stays out of negative territory. We won’t see the first estimate of first quarter GDP until late April.

And forecasts for second quarter GDP growth are shocking! I have read a lot of estimates and most analysts I follow expect the economy will plunge 20% to 40% in the second quarter. Wow! If the latter (40%), that will collapse the economy into Depression-era levels. That is really scary. Fortunately, most forecasters expect the economy to rebound in the second half of this year, assuming the coronavirus crisis peaks in the next month or two and heads lower. That’s a big assumption!

Keep Fighting Corona, But Understand Economic & Health Risks

No one credible is suggesting that we scale back the national lockdown just ahead because it is seriously hurting the economy. I certainly am not. On the other hand, I believe thinking Americans (like my readers) should be aware of the consequences of a severe economic contraction – and the almost certain large increase in the death rate among the unemployed.

I believe President Trump’s suggestion [in late March] that we might be able to start removing restrictions by Easter was just wishful thinking, or maybe just giving the country some hope that the coronavirus crisis might peak in the next few weeks. Or, as the media would have us believe, he is either clueless or knowingly lying, or both.

Fortunately, the president clarified his thinking in a daily coronavirus press conference. President Trump said that he and his task force now believe the corona outbreak would peak by Easter or the end of April. If true, that is fantastic news! And the president further clarified that if this happens, economic restrictions could begin to be lifted by the end of next month

Of course, it remains to be seen if this latest optimism that the virus will peak sometime in April proves to be true. Some epidemiologists still believe the peak won’t come until May or early summer.

My point is simply that we should all be aware that recessions cause an increase in the U.S. death rates. And the more severe they are and the longer they last, the worse the loss of human lives.

While a few are suggesting we should cut back the fight against the coronavirus because of the damaging effect it has on the economy, our leaders have to be very, very careful when they decide to scale back the national lockdown. Doing so too early could be disastrous health-wise, while doing it too late is bad for the economy and will lead to more deaths among the rapidly rising number of those unemployed.

U.S. Has More COVID-19 Cases Than Any Other Country

According to the CDC, confirmed cases of the coronavirus topped 160,000 as of March 30th, which [was] considerably higher than any other country in the world, according to the WHO. Italy, Spain and China now come in 2-3-4, respectively, with current case numbers in the low 80,000s as of [mid-March].

Fortunately, the number of new COVID-19 cases in China has reportedly peaked and is falling. The numbers in South Korea, another hard-hit country, are also reportedly falling rapidly. While new cases are still climbing in the U.S., most experts believe we will see the peak sometime in the next couple of months. Let’s hope and pray it is sooner rather than later.

The longer the U.S. economy remains in lockdown, the higher the nation’s unemployment rate will rise, and the more deaths we will see among those people for the reasons discussed above. While this is a difficult issue to address, I feel that my readers should be aware of the facts. I hope this has been helpful. 

Hang in there, everyone – we will get through this! Wishing you strength and good health,

Gary D. Halbert.  [March 31, 2020]