Why "reopening" the economy won't save the economy

A large majority of people surveyed say they are concerned that restrictions on social distancing will be lifted too soon. Even before cities and states issued stay at home orders, people were avoiding restaurants and other crowded places, according to Matthew Iglesias of Vox. There's no reason to think that "reopening" the economy is certainly going to make people think it's OK to mingle in crowds again.

This week, governors in states like Florida and Georgia are moving to reopen bowling alleys, nail salons, and dine-in restaurants in an effort to get economic life moving again. And an organized campaign by conservative economic interests is underway to lift restrictions faster in more places.

This will be an experiment, of course, but the best available evidence casts doubt on the idea that enough customers will return to make it possible for small businesses to stay viable without additional government assistance.

For example, we know customers began abandoning America's restaurants before they were ordered closed, that the handful of states that have avoided broad lockdown orders are still feeling economic pain, and that huge swaths of the economy that have not been shut down are nonetheless experiencing a precipitous decline in sales.

It's also hard to imagine that a lot of people who have lost their jobs due to the pandemic are going to get them back if the economy is "reopened." And it's unlikely people are going to get on planes, take vacations, stay in hotels, or buy cars and other expensive items. As Iglesias concludes: "There's no way out of this that doesn't involve curing the dual fears of infection and income loss. The former requires real public health victories, not just vague assurances. And the latter requires much more in the way of financial support for ailing businesses, local governments, and households."

Photo by Krisztina Papp on Unsplash