Is the cure worse than the disease? The Times claimed today: ?If the coronavirus lockdown leads to a fall in GDP of more than 6.4% more years of life will be lost due to recession than will be gained through beating the virus.? It?s hard to know where to start with this nonsense. It?s based on a paper currently under review at a journal entitled Nanotechnology Perceptions, which simply assumes that a fall in GDP translates mechanically and directly into a fall in life expectancy.
It?s this sort of reasoning that appears to be leading President Trump to call for an early end to restrictions in the US, claiming that far more people would die of suicide from a ?terrible economy? than from the virus.
But the premise is simply wrong. A recession ? a short-term, temporary fall in GDP ? need not, and indeed normally does not, reduce life expectancy. Indeed, counterintuitively, the weight of the evidence is that recessions actually lead to people living longer. Suicides do indeed go up, but other causes of death, such as road accidents and alcohol-related disease, fall.
So at the most basic level, this argument ignores what the evidence says. But perhaps more importantly, the idea that the way to minimise the economic damage is to remove the restrictions before they?ve done their job ? definitively suppressing the spread of the virus ? is a terrible one.
Does anyone believe that, whatever the government said, we could get back to ?normal?, or something close to it, any time soon? If we were all allowed to return to work, many or most of us would, quite rationally, choose not to, for fear of catching the virus. And if, as the scientists predict, the result of loosening the restrictions was an acceleration in infections, then pretty soon many firms would simply stop functioning, as workers became sick, or had to stay at home to look after family members.
More broadly, restoring the economy to normal requires, above all, confidence. Amid continuing uncertainty both about their own finances and the wider economy, households won?t spend and businesses won?t invest. And that simply isn?t going to happen until the spread of the diseases has been contained.
