Zandi: Trump wants America reopened by Easter. That could send the US economy into depression
(CNN Business) President Donald Trump, fearing an economic catastrophe ahead of the November election, is hoping to swiftly remove the severe health restrictions imposed to fight the coronavirus pandemic. But opening America for business in a few weeks could have the opposite effect: It could lay the groundwork for a repeat of the Great Depression.
Trump said Tuesday he wants the United States "opened up and raring to go by Easter."
The goal would be to ease the debilitating financial pain caused by the unprecedented shutdown of large swaths of the nation's economy. Unemployment claims are spiking. The stock market has cratered. And gross domestic product -- the broadest measure of the economy -- will probably suffer an historic collapse.
But there are massive risks involved with quickly reversing the social distancing policies. Not only would a premature re-opening of the economy defy the advice of health experts, but economists warn it would backfire.
Instead of a one-time blow, the economy could face repeated shutdowns over a prolonged period.
"If the president decides to go 180 on us and open by Easter, that will create chaos and confusion. That is the prescription for a depression," Mark Zandi, chief economist at Moody's Analytics, told CNN Business.
The goal of the health restrictions is to slow the outbreak, buying precious time to prevent the nation's hospitals and doctors from becoming completely overwhelmed.
"If people are panicked because hospitals are overflowing and loved ones are dying, the hit to the economy will be even worse than if we remain in lockdown," said Zandi, who advised Republican presidential nominee John McCain in 2008. "It's a massive gamble -- and one without science on his side."
Trump said Tuesday he wants the United States "opened up and raring to go by Easter."
The goal would be to ease the debilitating financial pain caused by the unprecedented shutdown of large swaths of the nation's economy. Unemployment claims are spiking. The stock market has cratered. And gross domestic product -- the broadest measure of the economy -- will probably suffer an historic collapse.
But there are massive risks involved with quickly reversing the social distancing policies. Not only would a premature re-opening of the economy defy the advice of health experts, but economists warn it would backfire.
Instead of a one-time blow, the economy could face repeated shutdowns over a prolonged period.
"If the president decides to go 180 on us and open by Easter, that will create chaos and confusion. That is the prescription for a depression," Mark Zandi, chief economist at Moody's Analytics, told CNN Business.
The goal of the health restrictions is to slow the outbreak, buying precious time to prevent the nation's hospitals and doctors from becoming completely overwhelmed.
"If people are panicked because hospitals are overflowing and loved ones are dying, the hit to the economy will be even worse than if we remain in lockdown," said Zandi, who advised Republican presidential nominee John McCain in 2008. "It's a massive gamble -- and one without science on his side."