This is the Cato Daily Podcast for Wednesday, March 25th, 2020. I'm Caleb Brown.

Relatively little of the public discussion surrounding the novel coronavirus centers on the kinds

of protective measures that would both contain the virus and

allow businesses and employers to begin slowly ramping back up.

Instead, Congress appears poised to prolong many of the economic problems that a dangerous

pandemic brings with it. Cato's Ryan Bourne says that's a problem if the US

wants to get out of recession sooner than later. Well I think the most important thing to think about in regard this virus is why it's so different economically to an ordinary recession and why therefore it requires a different policy response to the extent it requires a policy response than an ordinary recession.

With an ordinary recession, GDP will decline a lot range of firms going bankrupt, usually the firms that were kind of

of weakest and in that rebound there would be a reallocation of

capital, reallocation of resources to new firms, and over time, you know, the unemployment rate, although it spiked falls, and we returned back to a degree of normality.

A pandemic is a fundamentally different economic phenomenon.

It's different in the sense that in the

in the sense that in the short term we almost want GDP to decline

because that's evidence that we're engaging in the social

distancing and not interacting as much in order to curb the spread of the virus.

And it's different in the sense that because no business or most businesses couldn't have foreseen such a

occurrence it's hurting both the viable and non-viable businesses, weak and strong businesses in certain sectors entirely.

The virus doesn't care what your balance sheet looked like prior to coming along it's kind of sweeping through the

economy and as a result of the virus itself changing behavior and leading to

different policies being imposed demand for certain activities is completely

cratering. So what Congress I think should be doing is thinking through from

where we are now, how do we solve the fundamental public health problem in the longer term,

...