Bird Flu Poorhouse

As the H5N1 virus spreads inexorably across the planet, governments must prepare not only for a possible (probable? inevitable?) public health catastrophe but also for the economic devastation a pandemic would surely inflict. The World Health Organization has estimated the likely economic cost at $800 billion, but that may be on the conservative side.

In the United States, federal and state legislation must be enacted to protect American families from financial ruin. This will be necessary because most Americans will follow the “social distancing” advice of public health officials to stay home in order to avoid exposure to the virus. Inevitably, those weeks or even months of self-quarantine will result in massive loss of personal assets as jobs and savings disappear.

Having escaped the super flu and survived at home, most of the U.S. population could find itself at least temporarily unemployed, with mountains of unpaid bills and at risk of becoming homeless through eviction or foreclosure. There is also the possibility of civil unrest arising from shortages of food, fuel, medicine and vital services. To make matters worse, infectious disease experts say the pandemic will come in two waves over the course of a year or more.

This is the looming crisis Congress and the states must address in advance, by establishing a debt moratorium for the duration of the crisis.

Federal legislation is required now to prevent banks, credit card issuers and all other federally chartered lenders from undertaking collection or foreclosure measures once a national pandemic emergency has been declared and extending for a reasonable period of time after the emergency has passed. The same repayment hiatus should apply to income tax payments, student loans and other direct payments to the federal government.

States and localities should urgently adopt similar legislation covering lenders not subject to federal rules as well as state and local tax obligations, insurance companies, landlords, utilities, etc. Because public and private schools at all levels may be forced to close, tuitions must be refundable or creditable. States must also be vigilant in protecting citizens from unscrupulous interests who will surely seek to profit from their misery.

Government at all levels will suffer huge losses of revenue and will be hard-pressed to provide vital services, cover entitlement obligations and meet payrolls. It may be necessary to institute scrip payment schemes and consider rationing of scarce commodities.

Not unlike the consequences of a thermonuclear war, the flu pandemic many experts say is inevitable will create huge challenges to the nation’s survival and will demand strong leadership. Our political leaders must put aside partisanship and rise to this existential task. They can’t begin soon enough.