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Mandating coronavirus face masks would strengthen US economy: Goldman Sachs

Jonathan Garber

A national face mask mandate would slow the spread of COVID-19 and potentially prevent the reinstatement of lockdowns that would wreak havoc on the U.S. economy, according to Goldman Sachs.

The daily number of new coronavirus cases reached a record 44,726 on Friday as a number of states including California, Florida and Texas experienced a surge in infections. Deaths and hospitalizations, meanwhile, are holding near their lowest levels since late March.

“The economic benefit from a face mask mandate and increased face mask usage could be sizable,” wrote a Goldman Sachs research team led by Chief Economist Jan Hatzius. Such an action, however, would lie well outside the authority of the White House; any executive order to do so would be unenforceable, serving merely as a recommendation.

Health officials have urged Americans to use the gear to curb the spread of COVID-19, but the items have become a political flashpoint, with some arguing they're unnecessary and refusing to don them.

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More widespread usage, though, might avert additional damaging stay-at-home orders. Also intended to rein in the pandemic, such measures forced nonessential businesses to shutter their doors beginning in mid-March, leading to the sharpest economic slowdown of the postwar era.

The U.S. economy shrank by 5 percent during the first three months of 2020 and is expected to have contracted by at least 30 percent during the second quarter. About 47 million Americans have filed first-time unemployment claims since the pandemic began.

The resurgence of the virus as lockdowns were lifted, however, has caused a number of states to slow their reopenings and sparked concern that some parts of the country would reinstate the closures.

Since the first wave of infections in March and April, it has “become clear that broad lockdowns are not the only way to lower virus transmission significantly,” Hatzius wrote.

The Trump administration issued a national “recommendation” in April that Americans wear a mask to help avoid COVID-19 transmission. The suggestion came after the World Health Organization said on March 30 that there was “no specific evidence” that wearing a mask provided any benefit.

Nearly 70 percent of Americans self-reported face mask usage in public, but that number varies from state to state, according to Goldman.

Statewide mandates for mask usage have raised the number of people who “always” or “frequently” wear masks by 25 percentage points and a national mandate could “increase U.S. face mask usage by statistically significant and economically large amounts” in states like Florida and Texas, the bank said.

Mask usage lowers the infection growth rate by 1.3 percentage points in the approximately two weeks following a mandate and reduces the death rate by 3.7 percentage points after a month, according to Goldman.

While Hatizus said a national face mask mandate could substitute for lockdowns that would cause a 5 percent drop in gross domestic product, the economic impact would be uncertain due to the firm’s analysis being based on a number of statistical relationships.

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Still, it “suggests that the economy could benefit significantly” from a national face mask mandate, Hatzius wrote.

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