How do we reopen American society in a way that keeps people safe but also puts them back to work and school? One of the most realistic and workable plans comes from a team of policy analysts led by Avik Roy, the president of the Austin, Texas-based Foundation for Research on Equal Opportunity.
Even without widespread testing, a vaccine, or a cure, they argue that we should reopen schools and allow healthy younger workers to goback to work because COVID-19 kills mostly older people with pre-existing health problems who can be protected without shutting everything down.
Roy argues that the massive expansion of government creates a further drag on the economy that is mostly invisible to DC bureaucrats and commentators.
The more we lock down the economy, the more we harm those individuals who are most vulnerable, who don't have the cash cushions or the white-collar jobs that allow them to keep going he says.
Even as he is hopeful that in many regulations that have been suspended during the pandemic will never return.
Avik thanks for talking to Reason.
Hey Nick it's always a pleasure to be with you.
How are you? You know doing as well as I can you are in Austin Texas right I am yep yeahokay and I'm in New York so you know it's weird New York is the epicenter inAmerica Texas has been doing pretty well so faryes let's uh you know talk about your plan why is it imperative that we openthe economy as quickly as possible well I mean every single one of yourlisteners or viewers knows how much economic destruction has been wronged bythe lockdowns you know everything is going out of state local federal levelit's been incredible as of the time that we're recording this video there havebeen 22 million new unemployment filings by Americans the impact on economicoutput could be even greater than that it's pretty much a catastrophe we're atbasically depression level economic activity now you might say well allthat's worth it because we're we're stopping kovin 19 right well that'sthe heart of the paper the heart of the paper is that maybe we could use a moretargeted effort to to get the economy back on line without this blunt-forceinstrument of locking down everything and also by the way we kind of need tobecause the the core idea in our paper is that you know we've been told andthere been all these other papers as well you know we just have to keep theeconomy a lock down for a bit here and once we get the testing going and we geta treatment developed for over nineteen and we we've we've developed moreimmunity as a community and and we've developed a vaccine and we're on our wayto develop a vaccine then it'll be fine and we can all you know unlock thecommon everything go back to normal the problem is there's a very good chancethat we could fail at each one of those steps let alone all of them at the sametime and any one of those steps I should say that relative all in the same timeand so what happens if we don't get testing ramped up fast enough whathappens if we don't develop a treatment that works in in the next couple ofmonths maybe it takes six months maybe takes 12 months to develop an effectivetreatment what then are we gonna keep the economy shut downfor twelve months and our answer is no we cannot write the economy shut downfor 12 months and therefore we have to think about everything we can do to getthe economy going again so let's let's uh dilate a little bit on the economickind of havoc that's been wrought so far in your paper you talked about basicallyin the month of lock down the first month of lock down GDP or economicactivity declined by about thirty percentyou mentioned 22 million unemployment filings in the expansion that took placeover the past decade there were 23 million jobs created so we're almostback to where we were circa about 2010 what are the costs youknow part of part of what's going on so far is that the discussion andunderstandably so has been mostly focused on the health outcomes you knowpeople are dying we want to stop people from dying what are the health outcomesthat are related to you know a depleted or a decimated economic sector wellthere is actually a lot of academic research on the topic of what happenswhen you have higher on point write rates for example thatthere's an increase in mortality due to higher unemployment now there are someconflicting you know countervailing arguments that like or evidence such asyou know if you really shut down the economy yes you in and of itself youmight have higher unemployment due to deaths of despair and things like thatbut because nobody is driving or fewer people a driver maybe if you weretraffic yeah I mean it's it's very complicated to do a true even if a faketrue cost-benefit analysis but but it deserves to be but there is a cost and Iwould say more importantly than the the cost in terms of fatalities is the humancost of keeping people out of work right we all know and there's a mountingevidence of the value of work and gainful employment apart from you knowjust you know a deaths and and things like that so there's a lot of there's anormos human cousin by the way you know let's not forget that there is also acost to the massive expansion of government that then creates a furtherdrag on the economy think of the fiscal drag that's caused by the massiveincrease in the federal debt just in the past couple of months the the furtherpressure on to raise taxes that will come up as a result of that and theacceleration of the potential fiscal crisis that comes from the point atwhich people basically decide that america's broke and stop buying Treasurybonds there's a lot of downstream effects from what we're doing right nowthat are incredibly costly and every month that goes by this is the key thingevery month that goes by that we continue to shut down the economy meanswe have to do more of this massive you know shovel out the door trillions ofdollars kind of relief and so that the timing is of the essence we have we donot have time to sit here and wait for a months and months and months do youthink that that's you know your group is the foundation for research on equalopportunity I mean your focus and I think this is you know a kind ofwonderful mission that you put for yourselves to talk about how do you howdo you take the people in the lower-income you knowwhatever you want to call it quartile quintile you know decile whatever andhow do you give them more opportunity about 37% there's a study that came outrecently from University of Chicago Booth Business School saying that if youstretch it maybe thirty seven percent of the workforce can work from homefull-time you know that includes most reporters a lot of a lot of health care/ not health care professionals who are working in hospitals but people whocommentate on all of this stuff do you think we're in a lot of ways the mediaand the chattering classes are kind of soft selling the difficulty that this isputting on people because we don't work from them I mean I've been working fromhome basically for almost 25 years now this is bad for me but it is not a youknow it's not a degree in magnitude or it's it's only a degree in differencenot in kind of what it was before the lockdownyou know it's it's funny Nick I've been thinking about this a lot because we putout our plan at the time that we're recording is we put out our plan a weekprior we put it actually on a revised version today with a lot of new evidenceand recommendations but the point in the week that in the week that the plansbeen out since we've recorded we're recording this I've been struck by thenumber of interviews I've done with people based in Washington who said welldon't you think it's pointless to try to restart the economy because everyonewill want to stay home and look I I certainly do agree that there are goingto be people who are risk averse and people who want to stay home but DC is apeculiar place in terms of the prevalence of that attitude and I thinkit comes down to two things that's one is what you described which is 37% ofAmericans have the luxury of being able to work from home with minimalinterruption to their employment two-thirds of the country cannot that'sa factor number one but factor number two which is arguably just as importantis that the Washington Politico media ecosystem prospers independently of thefunctioning of the real economy so if you compare DC white-collar workers tosay New York City white-collar workers or Silicon Valley white-collar workersyes all those white-collar workers can work from home but if you ask anyone inthe investment world are they happy that the economy is tanking they're not ifyou ask anyone in Silicon Valley whose businesses depend on a robustadvertising and business climate they're not happy they're yes they can work fromhome but the value of their businesses is getting crushed because business hasgone to a standstill so I think those other white-collar communities in whichthere's much more of an awareness of the economic damage and how it affects themdirectly I think they're much more eager to get this show on the roadyou know before we go to these specific recommendations that your plan lays outlet's also talk a little bit about the idea of testing and tracking or tracingor whatever one of the things that is interesting and I think different aboutyour plan than some others that have come at is that you're you're kind ofassuming the worst that we're not going to have for a bus testing and and youknow clearly between what was promised to us by you know both federalgovernment as well as state and local governments we're not seeing that kindof testing talk about we're testing is falling down and why it's actuallypretty unlikely that we're going to be doing you know millions of tests a dayon a repeating or a revolving basis well for anyone who really wants a moretechnical description of why testing is going to be hard to ramp up I encourageyou to read the paper at free or but to boil it down for your your audience herewhat it comes down to is that there are two kinds of tests broadly speakingthey're antibody based tests and there are viral RNA based tests that actuallylook at the amount of viral RNA in your body the antibody based tests haveseveral advantages of several disadvantage the advantages are they'requick and they're easy to use you can even use them from home in certain casesthe disadvantage is their accuracy is a lot lower and also what antibodies ariseafter you've had infections you can go a couple weeks after you've been infectedand not yet have antibodies the antibodies really start to pop up afterthe virus has been in your system for a couple of weeks so an animal adabot anegative test isn't proof that you aren't infected and anantibody positive test isn't proof that you're immune to future infections itmay be that you've generated antibodies but they don't actually help your immunesystem fight off a future infection we just don't know right now now the DNAtests the RNA test excuse me the what are called PCR tests for polymerasechain reaction those tests are much more accurate at detecting whether the virusis present in your system the problem is those tests are much more cumbersomebecause you know detecting DNA or RNA in your body is just requires a lot moresensitivity it requires healthcare professionals to administer the test andand and do the testing so it can only be done really in clinics and labs andhospitals and places like that so there's just a bottleneck there in termsof there's only so many healthcare facilities we have to administer thert-pcr test so as a result we're faced with one choice test that can scale upin theory but are inaccurate and tests that are really accurate but are verycumbersome to administer and hard to scale on so so we're kinda let me saythat we it's gonna take us a while to scale up the testing a long time itcould be six months right and so I mean we're kind of early on if we want to doanything before that we're gonna be kind of flying blind in terms of you know dowe know what percentage of the population or what individuals areinfected or not your basic you know so I mean basically what you're saying inyour plan is we need to open the economy as quickly as possible and we're gonnabe doing that with we're gonna be kind of flying without instruments in a veryfoggy like nighttime scenario you do say we should be using quarantines andcontact tracing as things open up but what is the meat of what are the actionsthat need to be taken do you think to open up the economy or open up societymore broadly as safely as possible well before we get to that I do want to saywe're not flying totally blind at this point Nick we do have a reasonableamount of evidence to help us characterize what's actually going onwith koban 19 first of all there have been a handful of a community-wideantibiotic testing program so for example very recently Santa ClaraCounty and Silicon Valley did they surveyed I think was three thousand orsix thousand people in their community with a demographically representativesample to see how many people were infected and it turned out that thereare about 60 times 6-0 60 times as many people infected with Coppa 19 based onantibody testing as people who actually had symptoms of any sort of disease orillness related to Cova 19 which which gives us a great deal of confidence thatthe risk of infection the person that you'll be hospitalized or died becauseyou've been infected is actually much lower than then the worst case in errorsand have indicated the other thing we know about koba 19 is that itdisproportionately affects the elderly if you're over 85 you have an over 1, 000fold likelihood of dying from Coe by 19 than if you're under 35 so the young arevery low at risk for hospitalization death and the elderly are much higher atrisk for hospitalization and so those two things and also by the way if you'resort of middle-aged like you and I are Nick then if you're if you have diabetesor you have other chronic diseases that can make you more susceptible to riskfor Kovan I know some stuff yeah and and and that you know if you're safe 50 andolder and you don't have underlying conditions you're looking at a couplepercentage points two or three percent of being hospitalized lower than that ofdying from the disease so part of your pitch is that the younger you are themore freedom you should have to reenter the economy can you talk a little bitabout that and and what what concrete steps would change if we reopenaccording to your plan all right so that's those are the key things so it'sbecause we're not flying completely blind because we do have some evidenceas to the relative risk of different populations that does does give us someopportunity to reopen parts of the economy strategically so this is whatour plan is not some just open the floodgates and let everything happencome what may it's more it's more careful than that sothe idea is first let's open the schools K through 12 and pre-kbecause the youngest people in our in our country are the lowest at risk forhospitalization and death and getting people into schools has two effects oneit helps kids get educated 2 it also helps the parents of those kiddos kidsgo to work because right now there are a lot of parents who can't work becausethey have to take care of their kids every day so that's a huge opportunitynow we do care we do take care to say look if you are a child who lives withyour grandparents or other at-risk individuals maybe it's best that youcontinue to stay at home and for those individuals we got to do more withvirtual learning and other online technologies to help those individualskeep what about what about teachers you know because teachers tend to be youknow I'm assuming that most teachers are somewhere between about 35 and 65 but doyou screen for them or do you allow them you know in the more robust version ofthis would you allow them to decide whether or not they want to putthemselves you know around people who may be asymptomatic but carriers of thedisease in the plan we recommend that older teachers and staff stay home anddon't return to schools but you know ultimately because schools are run atthe local level you know localities will be able to experiment with a widevariety of approaches in terms about adilyn maybe you really focus on testingor maybe you leave it up to the teachers say hey here are the risks sign adisclosure form saying or a consent form saying you understand the risks and thenif you want to continue working that's up to you because there may be somepeople who feel that was like I don't care if I'm 70 I still want to teach mykids so let them have the choice right so maximize that that latitude and youalso talk you know you said like let people sign waivers saying you know thatthey give informed consent essentially to say I might be you know exposed toCova 19 you talk in the plan about changing relaxing the legal liabilityfor states as well as for employers can you discuss that a little bit more yeahso one thing we talked about in the plan is is so the part of the plan that'sabout having people re-enter the workforce leaving aside the schoolsgetting younger people in particular in the workforce remember one things that'sso weird about our situation now from a policy standpoint is thethese disproportionately affects people who are over 65 the workforce isdisproportionately under 65 and yet those are the people were locking out ofthe economy right so we've got to do everything we can to get younger peopleback into the workforce and one way we can accelerate that not just for theyoungest and the healthiest people is to offer a tax credit to employers whooffer tests to their koba 19 tests to their to their employees that not notonly would that do a lot to bring more people back to work but for restaurantsand retail shops and other places it could help those the consumer feelconfident that that restaurant or that shop is is Co bid free so it could havetwo effects and so employers can do that but the one that the challenges are wehave all these regulations right now about the ability of employers to dothis kind of thing because if you're an employer and you administer a test likethat to your worker and you know the result of that test there are certainprivacy regulations in place that you'd have to sort of at least create somekind of safe harbor around and also liability around you know how safe ourbure are the liability around how those tests are deployedwell the way or is maybe reluctant to do it right but but then you also do createa kind of market in you know as you were suggesting just as a restaurant has aletter grade or something from a food inspection we would say you know we testour employees for kovat blah blah blah and that that would help make thatrestaurant seem more acceptable to customers why why attacks a set ofrather than a Direct Subsidy I mean we just passed a 2.
2 trillion dollarbailout it's the beginning of multiple more bailouts to come clearly before theend of the fiscal year what why not just a straight subsidy you could do it as adirect subsidy I mean from an economic standpoint the effective tax creditthat's you know versus a subsidy are pretty similar so from my standpointit's it's not that important whether it's a direct subsidy or a tax incentiveif you if you administer a test today in theory it's deductible from your taxesso the concept here is that this would be something on top of the deductibilityof the expense for for a business so however you want to do it is fine byme you know I'm agnostic on that now you you still talk about in the in the paperthat certain types of gatherings would be prohibited talk about you know youyou're basically willing to reopen all aspects of the economy subject to theprovisos that you had before but then there are certain types of you knowtypes of I guess workplace or businesses like nightclubs and whatnot or bar asthey say no this is this is a no-go area talk about the restrictions in your planand then how do we know when things have passed enough so that we can say okayyes to nightclubs again the I think the way I'd put it Nick is we have to gofrom a mentality the mentality we've had for the first month of this lockdown ishow do we get everyone to shut everything down if you're a governoryou're like how do you convince people to stay off the beaches and stay out ofthe restaurants and stop talking hanging out with other people and going on datesor whatever right so that's been the mentality up to this point and whatwe're trying to do with this plan is change the mentality to want to wherewe're thinking every day about what section of the economy we can reopenwhat section of the population can we liberate from these restrictions and sowhile our plan does accept that some restrictions will need to continue inthe riskiest types of activities like big gatherings indoors for example ourour goal is to say let's take the lowest risk types of activities and reopenthose so that means anything that you can do safely you know taking intoaccount things like social distance so when you open a restaurant let's try tomake sure that the restaurant opens up with maybe fewer tables in it in itsfloor plan and things like that which means of course the restaurant will notmake as much money as it did before but at least it's something right so ourgoal here our mentality with all this stuff is to say how can we open up thatpart of the economy as soon as possible without jeopardizing public health andand our our goal is also by the way as evidence comes in right we're still veryearly in the evidence gathering stage here like you were talking about beforeso it may be that over time we learn that certain categories of people thatwe thought were risky we're not or certain types of activities that wethought were risky or not and the more of that evidence piles up the morewe can can o reopen the economy with broad public support and broad politicalsupport across the ideological camps what is yourswell before we get to a broader question so let me ask you one other thing whichI think would particularly or conceivably raise libertarian hacklesyou say that you would require negative tests for kovat 19 for passengers on airan Amtrak Amtrak is minimal you know the number of people who actually travel onAmtrak even in the Acela corridor it's small but it's a federal system but whyfor air passengers why would you say you got to have a negative test for thatwell it's a great question I mean at the end of the day I think you're just gonnahave a lot of people who are not gonna want to fly if they think they're gonnabe stuck in a metal tube for five hours or three hours or whatever it is withpeople who are infected with stars polka – so you've got to restore confidencesomehow it's gonna be difficult because they're about 2.
7 million people who flyon planes a day in the precoded world in the u.
so how do you get that how doyou get testing up to a scale where you can you know ramp it up like that it'sgonna be hard but at the end of the day our economy cannot go back to what itwas if travel is effectively shut down like it is today so it's just like withwhat we were discussing before you know it's not that we like these restrictionsat all it's not like that that we're trying to create a nanny state it'squite the opposite at the end of the day the way we look at this whole this wholeproblem is that we've got to lift as many of these restrictions as possiblein a way that is aware of the public health risks and and and strategic aboutthat because at the end of the day if we have another spike in kovat infectionsthen there's going to be an award is not in anybody's interest right so if wewant to have the freest possible economy in the in this environment we've got toget you know move up move the ball down the field in a more gradual way do youknow Ronald Reagan was famous for saying that there is nothing so permanent as atemporary gum program I think when we talk about youknow spending issues but especially with the civil liberties or the idea thatgovernments at all levels but especially you know the bigger the level or youknow the the higher up the bigger the impact is how do we make sure that someof the restrictions on you know on mobility on movement but especially onthings like having to test or you know showing that you you know kindof an internal passport system on less where I've done this so I can do thishow do you make sure that those are limited only to a crisis period well Ithink what's what's really what I hope will happen first of all is that the theevidence as it accumulates and rolls in will show that COBIT nineteen is farless dangerous than some of the PhDs out there with their models thought therewas there was enormous deference to a very very small number of people whowere projecting disaster scenarios I mean two million people one the CDC'soriginal doomsday scenarios 1.
7 million Americans dying now the accepted figurewhich may be revised downward is more like sixty thousand which is awful butis a long ways from 1.
7 or two million people yeah I mean 60, 000 is a normalinfluenza year in the United States and look some people will argue well youcan't compare the two because the 60, 000 is the result of all these interventionsright I don't think we can be sure that maybe they're the result of theseinterventions maybe they were the result of some interventions but not all ofthem maybe they're not the result of these interventions if you look at acountry like Sweden where there's been a much more modest policy response thepattern of the infection has been pretty similar to everywhere else so how andeven within you know this is something that I think will be will be I hopewe'll be discussing for a long time to come when you look at states you know astate like Florida which was very late to lock down and got you know thegovernor there get a lot of grief for letting Spring Breakers come thereinfection rate is better than a lot of states I'd locked down earlier and havebeen more draconian and restrictions so the correlation between public policyand the path of the disease it's not it'snot exactly clear that you know keeping people at home that's right so it'sgoing to be very important for organizations like yours and mine too toput that pedal to the metal and make sure that we're highlighting the policyresponse and its relationship to what actually happened at particularly astime goes on right now obviously there's a lot of uncertainty we don't we can'tdraw firm conclusions about a lot but but there is a mounting pile of evidencehere that the policy reaction was was an overreaction a big part of why by theway is because most of the policy response is a playbook that comes frominfluenza and coronavirus kovat 19 is not influenza it disproportionatelyaffects the elderly in a way that influenza influenza also has a skewedtowards the elderly but more because the elderly are just already sick whereasthe sku here is much greater and so there was much more of an opportunity totake advantage of that knowledge to say hey let's really be careful aboutnursing homes let's be careful about elderly populations but let's let peoplego to school particularly younger kids and let's like younger people behaveresponsibly by the way with young people your eye does your plan and lookingthrough it I saw the K through 12 stuff what about colleges and universitiesbecause this is I know a lot of people in higher ed and obviously you knowthere's tons of young people in higher ed it's unclear whether or not collegeswill be reopening in the fall or you know where if they'll be doing it kindof in a in a partial way well listen I'm a huge college football fan so Ipersonally hope that the colleges go back it's a shame you live in Texas thana state with the terrible college football but so I so all that say wedidn't address it in the plan because we felt that the college question is isvery complex as we've got very large student bodies you've got a lot of olderfaculty and staff so there it just there was just the complexity of how to untiethat knot was a little harder I think whereas the K through 12 in the pre-ksituation is much more high ambiguous in terms of the in terms of the healthPublic Health Seiden I think on the one hand I'msaying we need to make sure that any incursion any growth of government interms of spending or in terms of surveillance powers is sharply limitedto a crisis situation and it ends there on another level I want to ask you aboutyou know there's been a number of regulations and restrictions on businesson health the TSA etc where they've been like you know what in the face of kovatwe're not going to require and this is part of your paper you know states arenot going to require medical professionals who are licensed in onestate to sit around and pay extra money and cool their heels or take uselesstests to be able to practice in another statehow do we make sure that the kind of libertarian animus in some of this toget rid of restrictions that we say hey you know what this we can we do we can'tafford to have this restriction how do we make sure that that mentalitysurvives the end of the pandemic and that you know it is it is it too broadto say if a regulation was getting in the way of helping people stay safeduring the corona virus pandemic it should never be brought you know itshould never see the light of day again yeah a great question and again this isan area where libertarians and other pro-freedom activists have got to putthe pedal to the metal and say and hold policy makers and politiciansaccountable and say hey this is ridiculous why do we keep why do we havethese antiquated laws on the books that are all about gilda style protection notabout actually helping patients and doctors do their jobs let alone nursepractitioners and nurse and essences and everything else I mean when I moved toTexas from New York you know yes I had to get a Texas driver's license but Ididn't have to do it on day one I had to do it you know within a certain timeframe so you didn't have to take a driving exam you just yeah I didn'texactly I didn't have I didn't have to stop driving for six months while I gotmy driver's license right so like this idea that somehow if you move from oneUS state to another US state somehow you're suddenly incompetent to practicemedicine is ridiculous so what's a simple adjustment would be to say firststate to say okay the next time your license comes up for renewal you have torenew it in our state and not in that other state but in thetime will honor your license so it's a temporary thing that doesn't reallyaffect you and allows you to practice immediately if you move to another statethat would be a simple reform that would do very little to undermine statesovereignty and licensure and yet would create a lot more mobility andflexibility so there are lots of things like that that we could do yeah youryour background is in healthcare I mean that was you you were a major voice inarguing against what became known as Obamacare and whatnot how do you thinkthis pandemic is going to affect the healthcare industry of the medicalmedical delivery sector because yeah you know and and also can you make sense ofthese competing stories you're here one wasn't early on and I know in New YorkState and New York City we were told that hospitals were going to beabsolutely crushed by Kovac patients we need Andrew coma at one point was sayingwe need something like 40, 000 ventilators they had 12, 000 they are nowloaning out ventilators to other nearby states and things like that how is thisgoing to affect the medical industry I really worry about that piece of it onmultiple levels one I see a lot of small physician practices that are gettingcrushed because patients aren't coming in and they're just like smallbusinesses anywhere else and so there are a lot of small clip that doctorspractices that are there hemorrhaging money right now the other thing I worryabout is hospitals the biggest problem with our health care system in terms ofhow expensive it is is hospitals and now you're gonna have every single hospitalgo to their local senator or congressman and say you've got to give us more moneyyou've got to subsidize this more you've got to protect us from more competitionbecause if you don't what happens the next time there's a pandemic and we gobelly-up and so there's going to be an incredible I fear an incrediblepolitical urge to protect these dinosaur incumbent hospitals that are parasiteson the economy and some of them not all of them of course but but some of themthe way they overcharge you because there are regional monopolies and knowthey can charge you whatever they want and take advantage of that incumbentprotection you so it's a huge problem and and I thinkI worry that the the movement that we're very involved in to try to create morecompetition more choice in how you get your hospital care is going to bestymied by incumbents in this in this era you know it's almost kind of quaintto remember that we're in the middle of a presidential election year and thatbefore Bernie Sanders bowed out he was a very strong proponent of single-payerhealth care you know Republicans often talk a good game about wanting to bringthe free market into health care but they all law Medicare which is thesingle-payer system one of the weird outcomes of this kind of pandemic andinternationally is that single-payer systems or non single-payer systems youknow it's hard to say ok did one perform better or not what is your sense firstoff of how health care is financed how has that affected different nationsresponses and then secondly politically within the u.
do you think this isgoing to push people towards embracing single-payer health care or not or is itjust a non-issue as far as that particular topic goesthat's a great question Nick and we actually are in the process of free upof rolling out a major study of international comparison ofinternational healthcare systems where we don't directly talk about kovat 19because it's just too new of a situation but we do talk a lot about internationalhealthcare system and just like you said there's no real correlation between thekind of health care system you have from an insurance standpoint and how yourcountry performed so Italy is a single-payer system they obviously haveborne the brunt of this on the other hand so is Taiwan and they've done okayright similarly Singapore's done reasonably well they're much moreconsumer driven system Switzerland has done all right their consumer drivensystem the u.
is sort of half-and-half we're doing sort of in the middle I'dsay what really seems to have correlated success in dealing with this pandemic isnot single payer versus market-based healthcare it has been more if you wereone of the countries that dealt with SARS the original SARS in 2003 which isthe Pacific Rim countries if you're Taiwan or South Korea or Singaporeand you have that muscle memory of what it was like to deal with SARS which wasjust as terrifying for them as Koba 19 is for us that meant that when when thestories started coming out of Wuhan they took it a lot more seriously than therest of the world did and went swung right into action with a lot of thetools they developed from that experience with SARS in 2003 so my hopeis that we will have something some of you look at those countries todaywriting precoded 19 legal those countries today their economies arereasonably free if you look at the Heritage index of the world you knoweconomic freedom or the phrase ERISA to do whichever one you like you know thethe hong kong's and the and the singapore is do pretty well on thosecriteria and South Korea as well so and Taiwan so those are relatively freecountries and they stayed relatively free despite SARS the experience of SARSso my hope is that we should not see this crisis as an excuse for a permanentdecrement in our economic freedom we should in fact use it as an opportunityby first of all making sure that these temporary policy measures are astemporary as possible but also to the point you made earlier making sure thatwhere we're pointing out how deregulation not just a say telemedicineor license you know you know license licensure but things like the fact thatwe depended on a single CDC lab to develop the test for Kovan 19 in a waythat really harmed our ability to respond to the situation that the FDAwent out of its way to stop people from developing their own homemade testsearly on in this crisis when it could have really helped there are a lot ofthings to re-examine and again there's going to be a lot of opportunity I hopefor people like you and me and others to do that you you mentioned it in passingthe idea you know we have something like 23 trillion dollars in in national debtright now and and that's probably I mean we're probably going to spend anothertwo trillion dollars before the end of the fiscal year I'd you know I thinkthat's a safe that maybe even conservative almost doubling the federalbudget for 2020 and in the pew know in the span of a couple months what is theis there a predictable effect of first off of having a massof national debt like this on economic growth and prosperity and then whathappens when you top that off I mean you know with I I don't even know what themetaphor is but where you might be adding you know a couple of trilliondollars of debt in a in a in a couple we already did and a couple month periodwhat does that do in the short term in the mid term and in the long term do youthink to economic activity well in the short term it's unclear right I mean Ithink that the biggest impact on economic activity is just a lock downand getting people comfortable with resuming something resembling a normallife in the mid to long term the picture isbleak in terms of the impact of the fiscal stuff we don't know exactly whenthe reckoning will happen but we do know that and there was a study done in thelast recession the Rogoff and Reinhart program yesterday where they said if youif you if your debt to GDP ratio exceeds I think ninety percent then the impacton economic growth the dragon on the nama growth is considerable and there'sno larger country that can bail out the United States if we we become insolventyou know we're stuck and by the way before this crisis we were looking at asituation where within a decade we're gonna be spending more on interest onthe federal debt than we were spending on national defense that's how big aproblem is so you know what happens to Bitcoin in this environment obviouslyBitcoin price has been volatile and they in 2020 but could we see a situationwhere if people lack confidence in the credit of the United States the FullFaith and Credit United States that we move to alternative assets like goldenand cryptocurrency as a store of value I think that's something that may verywell happen as things shake out and if that happens then the u.
is ability toborrow money to finance that debt will start to decline and become moreexpensive and that could lead to a spiraling in terms of the the fiscal andfinancial and economic crisis so this is a very serious problem and I really Ithere's there's no precedent for it in terms of our politicians being able toreduce the deficit and debt so you know good luck to us all yeah I mean oh youknow though I mean annal it's not even an analogue it'sjust kind of a premonition I guess after World War twothere had been massive spending both because of the New Deal but especiallyWorld War two and then the federal government really cut spendingparticularly on defense but on a lot of other things and deregulated the economyvery quickly and there was a burst of activity it doesn't seem like thatpolitical economy makes sense anymore you know when the when the recessionended the bailouts didn't end government spending didn't end really sothat's going to be quite challenging could you also before you move on fromthat let me just say there's a couple of important differences between the worldwar two time and now and the different the key is the most important differenceis that we have Medicare and Medicaid we have these giant health careentitlements built off of social security in a way that are on autopilotso World War two spending was subject to congressional appropriations in fiscalwonky terms it was discretionary money every year Congress decides how much arewe gonna spend on this versus that the Medicare and Medicaid are not like thatthey're on autopilot Congress actually has to pass laws that they want torestrain spending on Medicare and Medicaid and that's you know half thebudget right now so we problem is that whew yeah so that's that's the realchallenge is that the structure of the way we spend money is completelydifferent than it wasn't World War two if you look at discretionary spendingit's actually reasonably low as a percentage of our economy by historicalstandards it's that mandatory health careentitlement spending that's out of control I think you know a good startingpoint would be to end the use of mandatory and discretionary as budgetterms because none of it is mandatory all of it is discretionary but and and Iknow even when I started writing about the federal budget in the early 2000sreally with you know with regularity it used to be you know that the startingpoint of every budget discussion is that 50 percent was in the discretionary youknow pile and 50 percent was in mandatory and it's no longer the caseit's more like 2/3 is mandatory and it's ramping up quicker and quicker how howdoes a kind of diminished or a flatline economy affect you know people in thebottom half the bottom third of the incomedistribution and-and-and of the opportunity to get because again yourorganization is about trying to create more opportunities for people who haveyou know fewer economic prospects your educational process prospects you knowwhat what can be done particularly to help ignite that part of the economy sothat you know because this is partly I think about am i I have two sons whowere millennial and a Jen's II and like you know for the first time I'm notjealous of them anymore because they are they're kind of being launched into aworld that has been riven by economic you know geopolitical and economiccatastrophe for a long time and that doesn't seem to be changing but what dowe do you know they're in good shape I mean they're coming from means andoptions and all of that but what do you do for people in the bottom third of theeconomy when you look at the landscape that we're going to be navigating fromthe next several years well just just to hammer home that point so at myorganization the foundation for research on equal opportunity we have a rule thatevery white paper we publish every scholar we hire has two centers work asarguments is policy reform ideas around how a particular idea will help improvethe lives of Americans whose wealth or income is below the US median and why dowe do that because at the end of the day those of us who believe in freeenterprise know that it's free markets that have lifted people out of povertyit's been the greatest contribution to material prosperity around the world butit's up to people like us to actually demonstrate that and do the researchthat shows that and come up with the reforms that will achieve that and sothat's what free op is centered around so when it comes to this particularsituation that's been why we've argued so passionately about the importance ofreopening the economy reopening the economy doesn't matter for you know acolumnist at the Washington Post whose job prospects are probably going to beabout the same but for that everyday American who works at a factory it'stheir life it's their entire income it's their entire economic possibility comesfrom that job or being able to send their kids to school andthe more we lock down the economy the more we harm those individuals who aremost vulnerable in our economy who don't have the cash cushions or theywhite-collar jobs that allow them to keep going and by the way you know oneof the things that when we put out our plan one of the the questions we got waswell you're arguing for a partial reopening of the economy or you'readvocating reopening the economy for healthy people younger people etc welllower-income communities a minority communities particularly AfricanAmericans have on average poorer health status than say upper middle class whiteso aren't you in a sense creating more racial discrimination disparities if youif you adopt this approach and my answer that is in the short term there may besome disparities in that sense but the disparities that's even worse is thefact that if you shut down the economy completely poor people suffer the mostand so at the end of the day if we want low-income people to do better we haveto have economic growth and we cannot have economic growth if everybody ispoor do you think you know this is a dark joke but early on when it becameclear that this covered 19 was mostly killing older people it was called theboomer remover we're at the twilight of the baby boom generation being you knowin the spotlight culturally politically economically do you think this is goingto speed along a kind of generational rift or a shift from older Americanspeople you know who were born I don't know you know before 1964 is last yearin the baby boom but to to those after and if so will that you know is that apositive thing in a strange way so you know what's crazy you were talking aboutthe presidential election earlier Joe Biden is actually too old to be a babyboomer he's actually a member of the older generation the Cylons know whichis crazy to think about it's like you know if you're if you're Gen X you'relike come on what is it our turn unfortunately for Gen X I think you knowit may be skipped over like Prince Charles rightyou know so that's a pretty crazy situation and you know it is what it isbut look I mean it's hard Neil how if you're interested in generationalwriting about generational cultural issues Neil how is the smartest guy Iknow on the stuff he writes for me at Forbes he's terrificI in general they're there aren't these kind of there isn't a generational warin the sense of Millennials hating boomers and even though there's this isa meme on Twitter because people have grandparents and they have relatives andthey have people they care about so I think we're in general we may havedifferent mores and different outlooks but in general we want all of we wantour parents and our and our grandparents to succeed where I think you really seethe generational divide is more in the future of our politics and this goesback to live free optics is the reason why we built free up is because we havebeen an are deeply concerned that the modern conservative movement in themodern a pro Liberty movement is not adapted to the way in which youngerpeople think about economic freedom that is to say that you know there's thisconcern out there that all the young kids are socialists and all this kind ofstuff that's not what we see we see Millennials Gen Z as people who reallybelieve in technology believe in innovation believe in entrepreneurshipbut they have no patience for the nostalgia for 1950s America in which alot of black people couldn't vote and and so that's that's the thing that'sdifferent from them versus people and say Joe Biden's generation and so what Ihope will happen is as we as we move to a world in which younger people are morein charge we stop having the the cultural debates that we were having inthe 50s and 60s and instead oh and in those days and mm I mean yeah yeah andand we moved to a system where or a country where we're not having thosekinds of arguments as much but were are being much more about economic policyand I think of when we do that the pro-freedom side has a lot to commend toit well we're going to leave it there I've been talking with over crows thehead free op dot-org the foundation forresearch on equal opportunity if you go to their website you can read theirpaper which has already been revised once the new strategy for bringingpeople back to work during kovat 19 avec thanks for talking thanks Nick.