As several Democratic-led states initiate new lockdowns in response to surging cases of the CCP virus, economists are warning of economic fallout from a new round of restrictions.
Michigan Gov. Gretchen Whitmer’s administration on Nov. 15 ordered high schools and colleges to halt in-person classes, closed restaurants to indoor dining, and suspended organized sports—including football playoffs—in an attempt to curb the state’s spiking case numbers. The order also restricts indoor and outdoor residential gatherings, closes some entertainment facilities, and bans gyms from hosting group exercise classes.
Michigan recorded 431 CCP virus deaths in the past week.
The new rules, set to last three weeks, are extensive but not as sweeping as the Democratic governor’s stay-at-home order in the spring, when she faced criticism from a Republican-led legislature that refused to extend the state’s coronavirus emergency declaration and authorized a lawsuit challenging Whitmer's authority to impose restrictions.
She faced pushback from those who opposed the decision to toughen rather than relax what already was one of the nation’s strictest stay-home orders.
The directives from Michigan come on the same day that Washington Gov. Jay Inslee announced the state would enforce new restrictions on businesses and social gatherings for the next month as it, too, continues to combat a rising number of cases.
Starting Nov. 17, gyms and some entertainment centers in Washington are required to close their indoor services. Retail stores, including grocery stores, must limit indoor capacity, and multiple-household, indoor, social gatherings will be prohibited unless attendees have quarantined for 14 days or tested negative for COVID-19 and quarantined for a week. By Nov. 18, restaurants and bars will again be limited to outdoor dining and to-go service.
Though not nearly as sweeping as those imposed earlier in the year, the restrictions in Michigan and Washington signified returns similar to measures taken in the beginning months of the CCP virus pandemic in the United States, when both were under strict stay-at-home orders.
Economists have warned that, compounded by the dim prospect of fiscal measures to ease the impact of lockdowns, the new restrictions threaten renewed economic pain.
"More businesses will be at risk of permanently going out of business, which would dampen labor demand and potentially spur new rounds of layoffs," Song added.
Economists at Brean Capital said in a client note cited by Axios that a mitigating factor to the likely economic damage wrought by another round of lockdowns would be whether "policymakers in Congress can extend the income bridge" and prevent "a second-round negative impact on the economy from the deterioration in state and local budgets."
Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Kevin McCarthy (R-Calif.) both rejected the offer put forward by Democrats.
McConnell said that the U.S. economy is coming back, which means targeted—and smaller—stimulus bills are needed.
Pelosi told reporters that she has no intention to pass a stimulus package that is only $500 billion, which is what McConnell has proposed in the past.
"Our position is the same it has been all along," Pelosi told reporters. "We're at the same place. Even more so.”