Whatever economic toll Mississippi and the United States suffer from shutting down businesses to prevent spread of the coronavirus, Iran’s example shows that it’s better than the alternative of letting the disease ride roughshod over an untreated population.
Iran’s economy was already in hardship before the virus hit, and its leaders made the decision to try to keep doing business as usual rather than face wrath from its citizens by putting restrictions on their movement.
It didn’t work.
Within three weeks of its first case, Iran had the third-most confirmed cases after China and Italy, and it was up to 1,135 deaths as of Wednesday. And the Middle Eastern nation’s economy still tanked, forcing Iran to ask the International Monetary Fund for a $5 billion loan, the first time in six decades it has requested such funding, the Wall Street Journal reported.
Cases continue to grow in Iran with dire consequences now if citizens don’t start complying with government requests to self quarantine. The internationally respected Sharif University of Technology in Tehran said in a new study that if Iranians begin cooperating the virus will peak in early April resulting in 12,000 deaths, but if they refuse to go along the country’s medical system will collapse, the peak will be in June and as many as 3.5 million will die, a Wall Street Journal story said.
Although unsettling to consider that much suffering, even among a longtime foe of America, the dire situation does offer some assurance that the U.S. has done the right thing by controlling the disease first and worrying about the economy second.
The general consensus among economists is that the cessation of activity will inevitably force the economy into a recession, but they don’t think it will as deep or as long of a recovery as 2008’s Great Recession. There’s also a proposed federal stimulus package being debated that would do things like shore up the airline industry and possibly pay $1,000 per person. The IRS has already given an extra 90 days from the normal April 15 deadline to pay income taxes.
The effects of all those policies are debatable, but together they should make some difference in offsetting the hardships from the “social distancing” of the coronavirus response.
Mississippi’s state economist, Darrin Webb, offered a reasonable outlook in a series of tweets Wednesday. He said he’s confident a recession is happening now but it won’t be evident in the economic data until the second quarter. He called it a “prescriptive recession” that is unique because it’s necessary to stop the spread of the virus by shutting down significant portions of the economy, which was going strong before the pandemic struck.
Webb predicted the recession will be “significant, but not like 2008.” He anticipates three quarters of recession nationally and gradual economic recovery starting in the first quarter of 2021, with Mississippi following a similar pattern but with growth rates remaining below the rest of the country.
That’s not a scenario anyone wants to face, but it’s one we can survive. And it’s much better than the alternative, as Iran is showing the world.