24 Mar 2020

Trump insists economy can restart soon despite spread of Covid-19

5:37 pm on 24 March 2020

President Donald Trump says he is considering how to reopen the US economy when a 15-day shutdown ends next week, even as Covid-19 is spreading rapidly and hospitals are bracing for a wave of virus-related deaths.

WASHINGTON, DC - MARCH 23:  U.S. President Donald Trump speaks at the daily coronavirus briefing at the White House on March 23, 2020 in Washington, DC.

Donald Trump is increasingly worried about long-term financial problems for the United States. Photo: AFP

"America will again and soon be open for business," Trump told a White House news conference. "We are not going to let it turn into a long-lasting financial problem."

Trump issued guidelines a week ago that he said aimed to slow the spread of the disease over 15 days, including curbing unnecessary travel. In the meantime, economic activity has ground to a halt in some states.

But watching the loss of many jobs and a sharp drop in stock markets and facing a tough re-election battle, Trump has privately expressed worries to aides and allies about the impact of the restrictions on the long-term health of the economy.

Trump told reporters it was possible to resume economic activity in states with what he said were relatively low rates of infection, citing Nebraska, Idaho and Iowa as examples, while continuing to work on the hot zones in other states like New York.

"If it were up to the doctors, they'd say let's shut down the entire world," said Trump.

Trump senior economic adviser Larry Kudlow signalled a possible policy change in an earlier interview with Fox News: "The president is right. The cure can't be worse than the disease. We're going to have to make some difficult trade-offs."

The White House would look at "a number of things," he said.

Trump, who had hoped to build his campaign for the 3 November election on a booming US economy, now is looking at hundreds if not thousands of deaths from Covid-19. Many of his Republican allies fear the toll on the economy would make it harder for him to win another four-year term.

Cases of coronavirus have grown more than 15 times since last week's guidelines. New York City hospitals are days from a crisis, Mayor Bill de Blasio said on Sunday. "If we don't get more ventilators in the next 10 days, people will die who don't have to die," he said.

Quite Grand Central Station is pictured in New York in the morning March 23, 2020. New York. Gov. Andrew Cuomo has ordered New Yorkers to stay home

Grand Central Station in New York is quiet as the city reels from the impact of coronavirus. Photo: AFP

Republican Senator Lindsey Graham, a Trump confidant, cautioned against prematurely lifting containment rules because of concerns about the economy.

"My advice would be to follow medical advice to contain the virus," he told reporters on Capitol Hill. "If we can take some pressure off the economy, fine, but my primary focus is to make sure the virus is contained and defeated. And we're just going to have to suffer through the economic consequences."

The Trump administration has been pushing for aggressive monetary policy steps to stem the economic hit of the epidemic, after the president spent several weeks playing down the health risks and rapid spread.

The Federal Reserve has rolled out an extraordinary array of programmes to backstop an economy reeling from sweeping restrictions on people and businesses that scientists say are needed to limit the spread of the coronavirus.

While Trump ponders ways to reopen at least parts of the economy, some advisers are warning that the spread of the virus is worsening.

"This week, it's going to get bad," surgeon general Dr Jerome Adams told NBC's Today show. Americans are not taking stay-at-home guidelines seriously enough, he said.

Treasury Secretary Steve Mnuchin said on Sunday the lockdown affecting large segments of the American public was likely to last 10 to 12 weeks, or until early June.

Fears of a depression

Over the last few days, some White House economic policy advisers have started to focus on how long lockdowns and other measures to contain the virus might last, said one adviser outside the administration.

Newly returned economic adviser Kevin Hassett's team has determined that if the shutdowns continue much longer, the United States could slip into depression, he said.

One source said Trump began talking privately late last week about reopening the country after the 15-day shutdown. Trump believes "we are strong and need a strong economy as we deal with this crisis," the source said.

Stephen Moore, the economic commentator whom Trump tried to tap for a vacant Federal Reserve seat last year but who, facing staunch criticism, withdrew his candidacy, has been particularly influential, the adviser said. "He has the president's ear on this issue," he added.

Moore told Reuters on Monday there is a re-examination in the White House of the wisdom of "a full scale" shutdown of the economy.

He said there were some who thought that "if we go on too long with the economy shut down, the human toll for that could be greater than the risk of the virus".

Medical experts say there is no way to return to more normal activity without knowing how widespread the virus is in the US population.

"No one wants to see this go on a day longer than it has to," said Dr William Schaffner, a professor of preventive medicine and infectious diseases at the Vanderbilt University School of Medicine. "But at the moment, the emphasis needs to stay on social distancing."

The United States is still nowhere near meeting the demand for tests, so US officials do not fully grasp how many Americans have been infected and where they are concentrated - crucial to containment efforts.

- Reuters

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