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JUDY WOODRUFF: Once again,
the hemorrhaging of American
jobs was in the millions last

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week. The official unemployment
rate is likely to spike to 20
percent by June, if that is

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not already the
case unofficially.

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And Federal Reserve Chair Jay
Powell warns that we could be
facing a prolonged recession

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that could damage growth
for years to come.

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Everyone wants to restart the
economy. The question is how.

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Paul Solman gets the views of a
Nobel Prize-winning economist.

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It's part of our
series Making Sense.

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PAUL ROMER, Nobel Laureate in
Economics: Right now, this week,
there is a choice about getting

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some more activity going
vs. protecting lives.

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PAUL SOLMAN: Paul Romer, who won
a Nobel Prize in 2018 for his
work on technology and economic

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growth.

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These days, he's focused on how
to avoid an economic depression.

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PAUL ROMER: Really, the only
way to get back to a healthy
economy is to stop the death

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and make people feel safe.

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PAUL SOLMAN: And ending
the lockdowns won't
do that, he says.

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PAUL ROMER: We're going to have
a kind of a seesaw pattern,
I think, of trying to open

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up, realize that we haven't
done anything to protect
against the spread of the virus,

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and then pulling back.

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And what we're going to just
have to do is find a sustainable
way to contain this virus.

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PAUL SOLMAN: That way, he's
been arguing, is mass testing,
everyone in the U.S. every

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two weeks.

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PAUL ROMER: If you don't know
who's infectious, the only way
to lock down and isolate the

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people who are infectious
is to lock down everybody.

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I think if we just test
everybody and isolate
the people who are
infectious, we can easily

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suppress it, and we can do it
without causing a depression.

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PAUL SOLMAN: But how can we
do that, given the well-known
shortages of test supplies,

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personal protective equipment,
laboratory capacity?

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Says Romer, how can we not?
Just look at his model.

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PAUL ROMER: Each additional
unit of testing frees up about
eight or nine people who can

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go back to work.

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What's the value of the work
the eight or nine people can
do? Man, the test is really

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cheap compared to what the
people can do. And for people
who say, well, we can't get

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a lot of them right now, I'm
OK with that. Let's just get
as many as we can right now

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and start to get some
people back to work.

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PAUL SOLMAN: Economics
is fundamentally about
costs vs. benefits.

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PAUL ROMER: Yes.

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PAUL SOLMAN: So all this
testing costs how much vs. how
much is added to the economy

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when the nine people
that you were talking
about go back to work.

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PAUL ROMER: If we can get the
cost of a test down to $10,
so one unit of testing per day

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will cost us about $3,600 per
year, if that frees up nine
people, then that means, at

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a median income of,
say, $50,000, nine times
$50,000 would be $450,000.

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It's like a hundred-fold
increase on your
investment. There aren't
very many investments

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where you get a 100-X return
pretty much guaranteed.

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PAUL SOLMAN: The latest
relief bill did include
$25 billion for testing.

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So, is $25 billion enough?

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PAUL ROMER: No.

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We need to commit about $100
billion a year to expenditures
on testing. That's enough

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to get us this 23 million tests
per day, or test everybody
every 14 days in the United

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States. The $25 billion is
enough to get going. It'll give
us some demonstration projects.

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I think we should be testing
and reopen, you know, for TV,
Major League Baseball. I think

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we should be testing everybody
in nursing homes. I think we
should be testing frequently

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everybody who's a
health care provider.

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PAUL SOLMAN: Are you
condemning the country for
not having had the tests?

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PAUL ROMER: No, no, no. Bygones
are bygones. I think it's a
horrible mistake to worry about,

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you know, who do we blame, who
are we going to punish, or to
be thinking about, oh, would

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have, could have, should have.

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PAUL SOLMAN: Romer does,
however, fault the Food
and Drug Administration.

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MILES O'BRIEN: The FDA
application was 28 pages' long.

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PAUL SOLMAN: Miles O'Brien's
recent "Frontline" documentary
described the challenges faced

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by a University of Washington
researcher in the early days
of the pandemic, when he raced

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to get a new test approved.

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DR. ALEX GRENINGER, University
of Washington: One of the things
is, they needed a document

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FedExed across the
country before they could
look at the document.

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MILES O'BRIEN: You couldn't
electronically transmit it?

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DR. ALEX GRENINGER: I could
electronically transmit it,
but they couldn't look at it

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until it was FedExed.

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MILES O'BRIEN: The FDA
told me it did review
Greninger's application,
but it was incomplete.

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They also said they were
balancing the need for tests
with concerns about accuracy.

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PAUL ROMER: I understand why
they have to be very careful.
But they're making people

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who are innovating, finding
better ways to do the tests,
jump through these extraordinary

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hoops. And it's taking months
to just get simple things done.

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PAUL SOLMAN: Case in point,
says Romer, the saliva
test approved last week.

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PAUL ROMER: You just
spit in a tube, much
better than those swabs.

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WOMAN: I'm sorry, but I
have to get in there, OK?

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PAUL ROMER: But it took almost
a month for the FDA to say,
OK, well, somebody can spit

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in the tube without being
physically present in front of
a health care professional who

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watches them while they do it.

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PAUL SOLMAN: Right.

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PAUL ROMER: I mean, if it takes
a month to make a decision
like that, we're never going

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to get to the faster, cheaper,
better tests that we need.

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PAUL SOLMAN: What about
people who've gotten the
blood test that shows
that they have antibodies,

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so they must have had the
virus? Are they then OK
just go back into the world?

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PAUL ROMER: So you can't restart
an economy with just the 5
percent who've got antibodies.

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You have got to let the virus
run through the community and
get to 60, 70 percent with

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antibodies. But it's a horrific
path to get there, because
a million people are going

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to die along the way. And it'll
take a year for that kind of
process to work through the

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whole economy.

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PAUL SOLMAN: What's your biggest
fear right now, economically?

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PAUL ROMER: The biggest
risk we face is that the
economic turmoil is going
to lead to political

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turmoil.

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We can rebuild. We can recover
income. But if we damage our
institutions of rule of law,

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democracy, basic
freedoms, that can take
a lot longer to rebuild.

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PAUL SOLMAN: Are we moving
towards the kind of investment
you think we have to make?

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PAUL ROMER: I am actually very
confident that it's going to
happen, because there are no

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good alternatives. We're
losing $500 billion a month.

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It's eventually going to dawn
on people that we can't afford
to keep doing that. And compared

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to that, $100 billion a
year is really pretty cheap.

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PAUL SOLMAN: In fact, Romer is
sure enough that testing will
soon be everywhere, he offered

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to put his money where
his heart is, $500 of it.

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PAUL ROMER: I'm so confident
that testing will be the way
out of this crisis that I

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will bet you that, in
six months, we will be
doing 20 million tests
a day in the United

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States.

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PAUL SOLMAN: So, I'm betting
against you now that we're not
going to hit 20 million a day,

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tests, in six months?

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PAUL ROMER: Yes.

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PAUL SOLMAN: And I pay
your charity if you win,
and you pay my charity?

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PAUL ROMER: That's a deal.

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PAUL SOLMAN: I
will take that bet.

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PAUL ROMER: OK. Have me back,
and we will see how it goes.

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PAUL SOLMAN: For the "PBS
NewsHour," the ever-skeptical
Paul Solman, now with
some skin in the game.