An Opinion.

As we are all getting inundated daily with statistics about the rapid and seemingly unstoppable spread of the Corona virus, compounded by even more bad economic and financial news; it is hard to see the forest for the trees, let alone a positive ray of sunlight.

There is a rational approach that can guide us in the right direction if and when we all focus on the solution rather than the problem.

I am not exaggerating or proposing a new line of thought when I mention that containing the spread of the virus as a platform to build my opinion on as a guideline towards a solution. This containment needs to be thorough, widespread, and all-inclusive in order for the following to work and bear fruits towards keeping America healthy. Not just its people, residents, and its workforce, but also its strategic assets and its economy.

My proposal is a three-pronged approach that will require drastic action but will ultimately result in a sudden and short-lived pain across the country:

Effective immediately we should shut down all businesses for a period of 30 days. This is nothing new to some of you. Bill Ackman actually proposed this drastic measure last Monday*. Only essential businesses will be allowed to remain open to the public, i.e. pharmacies and grocery stores, and any underlying distribution centers that continue to supply such essential businesses. That means we shut down all manufacturing plants, financial institutions, restaurants, bars, etc.

Any employee, whether full-time, part-time, independent or self-employed workers will be directed to the unemployment office for collection of weekly pays that are guaranteed by State and Federal Government. This includes gig-economy workers such Uber and Lyft drivers and also includes anyone in the service or hospitality sector. The unemployment check will be based on current compensation using current proportional rates.

The US Treasury should receive a revolving credit line with the Federal Reserve that can be drawn on to support supplemental payments to all States to fund the above for a minimum of 30 days.

All small business owners with up to 500 employees should receive loan grants from the State and Federal Government to continue to pay their monthly obligations during full closure, i.e. mortgage or lease payments, utilities, and general operating expenses.

All loan grants will be forgiven for small business owners if and when all previously employed staff is rehired after the 30-day shutdown. If the same amount of employees is not rehired, then the loans become payable to the State and Federal Government in the form of a long to medium term loan.

The above measures will be revised as appropriate and may have to be extended, based on the health conditions, containment of the virus, and the general health of the workforce.

In case the coast is not clear after 30 days, and the risk of contamination still prevails, the nationwide lock down period should be extended as is appropriate.

This drastic Government intervention, as painful and draconian as it seems, will not only result in rapid containment and a swift reduction of fear. It will also remove the current public sense of financial insecurity and consumer confidence, both of which seriously hamper our future and our belief in better days. It will dramatically shorten our recovery time as a nation and as the world’s leading economy.

The first question on everybody’s mind, at least those of you who are still reading, is “How much will this exercise cost?” and “Who and how we do we pay for all of this?”

The questions are very reasonable and warranted. My first answer is that the above intervention will never cost more than the path we are on today. That means that in the end, the slow and careful approach that will result in a long period of negative growth, recession, or even depression, and a very long period of economic recovery into mid 2021 will cost the same as the short and intense pain caused by an immediate shutdown.

In real figures, this exercise or the lack thereof will cost the US Government between $3 trillion and $4 trillion. This is not an exaggeration!

Safety and financial security are key components to our recovery, to our economy, and to our future.

Let’s bite the bullet and let’s stop sitting on the fence!

This is not about who ultimately wins this fight: the elephant or the donkey. This is about all of us, young, old, and anyone in between. This is about America! This is about you and me….together!!!

*Bill Ackman is founder and CEO of Pershing Capital Management.