I have often said that the greatest threats the US economy faces are the outside forces that we are not expecting, such as massive cyberattacks or pandemics. We are experiencing a small version of this phenomenon now — one that could get much bigger. In just a few months, the coronavirus has caused tremendous suffering and tragic loss of life. These human costs and the heroic efforts of medical professionals and others who are working tirelessly to stop its spread are clearly the most important considerations. Nonetheless, there are also economic consequences which could become substantial.
One cost of the coronavirus is that travel into and out of affected regions has halted. Airlines have stopped flights and are losing millions. Shipping is also down significantly, and major international conferences have been cancelled.
Another, larger problem is that workers in China are dealing with quarantines, and many factories have closed. The outbreak began during the travel-intensive Lunar New Year holiday, and people have been unable to return to their homes. Companies are trying to help, but it’s a difficult and slow process.
