The Silent Casualties of Coronavirus

AP

Coronavirus prompts a response which may prove more harmful than the virus itself

The entirety of the American populace has been shaken up. Many are forced to stay in their homes with only a few exceptions. With everyone stuck inside, removed from friends and sometimes even family, Americans have been left with an unprecedented amount of time to think. Ironically, we seem to be doing very little of it. Phrases like “flatten the curve” and “social distancing” and “the new normal” are cultishly chanted like a mantra, often without real thought into their effect on our society. 

In efforts to examine these actions more thoroughly, questions should be raised regarding our national response to the virus. Given recent events, there are three main questions at play. First, what demographics are disproportionately hurt by the coronavirus? Second, is the Federal Reserve’s quantitative easing (QE) appropriate given the current situation, if ever? Third and finally, will the cure cause more damage than the virus?

First, let’s examine which people are hurt most by the coronavirus. It is all too easy to stop the conversation at those who are infected. Sadly, the damage ripples far past the infected through our society in ways that may not be intuitive. As students, we feel these ripples. Classes have been moved to Zoom, residents evicted from university housing and lives disrupted. While at first glance these seem to be superficial problems, their consequences are much more material than they seem. 

Nationally, 70 percent of students take on debt to assist in paying for college. For many, part-time work is essential to supplement their college financing. Often, this work comes in the form of minimum wage jobs provided through the university and surrounding small businesses. With the university closed and many small businesses running skeleton staffs, students have been deprived of essential funds. 

This problem does not stop at our university, unfortunately. From March 15 to 28, approximately 10 million Americans applied for unemployment insurance. Since the program’s beginning, there has never been a spike of anywhere near the magnitude of that caused by our response to the coronavirus. Weekly claims rarely surpass 500,000 and have never passed 1 million, until posting 3 and 6 million new applications in consecutive weeks.  For now, the data is relatively raw. Until the dust settles, it will be difficult to calculate those affected most by the recent economic downturn. Your humble columnist suspects the majority of workers hurt by coronavirus will be our nation’s poorest: those reliant on minimum wage work to survive and feed their families.

Some readers may argue the Federal Reserve’s recent $2 trillion stimulus package may be our economic savior. This leads us into the second question: is the Fed acting correctly? To combat the virus economically, a $1,200 check to individuals and business grants of approximately 2.5 months payroll are currently being distributed. For those unfamiliar with economics, this may seem like a best-case scenario. Like before, at a deeper look, this decision may not be in the best interest of the American people. 

To evaluate this decision, case studies of monetary policy gone wrong can be highlighted. The driver force at play is referred to as quantitative easing (QE). In short, QE is when central banks print money to stimulate demand and fight against negative economic outcomes. The European Union fully embraced aggressive QE over a decade ago, but has struggled to see GDP growth above zero percent. Germany, widely regarded as the strongest economy in the European Union, posted a modest 1.5 percent GDP growth during 2018. During the same year, domestic GDP grew 2.6 percent. 

So is the Fed acting on our behalf as average, tax-paying citizens? Of course. But as the adage goes, the road to hell is paved with good intentions. We will not know the long-term effects of the Fed’s stimulus package until the future, but it would be prudent to analyze these decisions today before permeate damage to the economy takes place. Decisions like implementing QE have tangible impact on our lives, and the lives of future generations. A mistake today could spell disaster for generations to come. 

This brings us to our third and final section. On March 22, President Trump tweeted, “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF.”

His reputation and all-caps tweet format obscure the gravity of this thought. During times of war, tunnel vision on an object can hide the larger picture at play. Generals command their way to pyrrhic victories, at the cost of the war effort at large. As we wage war against the coronavirus, our leaders should not lose vision of the bigger picture—the long-term health and wellbeing of our country. 

Only time will tell if we are taking the right actions to fight coronavirus. While it may feel as if we are being held captive to the powers at play, we are not without recourse. Now more than ever, we need to rigorously evaluate decisions coming from state and federal governments. In lieu of learning the next TikTok dance, maybe check in with the powers at be.