There is a growing danger that the shutdown of the economy will inflict more harm than the coronavirus if the shutdown is not managed carefully. Unemployment is increasing. The risk of permanent business closures and bankruptcies is rising, and it will be increasingly difficult to avoid a long and painful stagnation, which will include increases in the death rate. It might not be too late to escape this, but it will require an immediate change of policy from governors.
The latest figures from the U.S. Department of Labor show that the unemployment rate on May 21 was 17.2%, the highest ever recorded in the current seasonally adjusted series, exceeding the previous high from May 1975. But this number almost certainly understates the unemployment disaster, because it only takes into account unemployment claims filed up to now.
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