America's testing failure means it is still flying blind

Berkeley

US NATIONAL income and output in the first quarter of 2020 was 1.25 per cent below what it had been in the fourth quarter of 2019, but still 9.5 per cent above what it would be by the second quarter of this year. Now that US national income has plunged 12 per cent below what it was at the start of the year, what should we expect for the third quarter?

America could always turn out to be lucky; but betting on that would not be prudent. According to Austan Goolsbee and Chad Syverson of the University of Chicago Booth School of Business, it was voluntary self-protection, rather than legislated restrictions on activity, that drove most of the decline in consumer spending this spring. Moreover, they warn that "if repealing lockdowns leads to a fast enough increase in Covid infections and deaths and a concomitant withdrawal of consumers from the marketplace", doing so "might ultimately end up harming business activity".