Suppose the government makes huge investments in building a respirator factory, an N-95 factory, and large scale testing capacity. Then, next month, the virus mutates, or a miracle cure is found and all of this stuff is unneeded. Would it all be a waste?
Well, I think it would not be. Who knows, in 5-10 years, there might be another outbreak of a respiratory disease, for which a stockpile of respirators and N-95 masks still come in handy. In addition, some of the investments in production & testing capacity might still be useful.
In addition, at present, there are many unemployed resources. Sending someone to work in a N-95 mask factory vs. sending them an unemployment insurance check doesn't sound like a big cost to me.
And, what if, heaven forbid, the virus does not mutate in the next couple of months? More N-95 masks, respirators, and increased testing capacity sound like they might be even be useful! Pouring money into this stuff also will increase GDP. It's as win-win as you can get.
Or, suppose that the US solves the virus problem, but it is still raging in Latin America and Africa. Well, in that case, these countries wouldn't have to merely turn to China for help, as they are now, but could also turn to the USA.
Also, economists rarely think about the emotional/psych. impact of losing your job (see Casey Mulligan's "Great Recession" = "Great Vacation"). I find it plausible that if you put someone who has just been fired to work fighting the virus, their emotional health may improve.
So far, the gov't (including the Federal Reserve), has done/is on the order of $4 trillion in fiscal and monetary stimulus (maybe more). I suspect it will be closer to $10 trillion when all said and done. And, how much have we spent on testing & ramping up PPE production?
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