St. Louis Fed President James Bullard on Friday said the federal government should take steps to create a “pop-up industry” that will create a tidal wave of coronavirus test kits to battle the coronavirus epidemic.
With a little help from Uncle Sam, coronavirus tests would soon be available at every corner drug store, Bullard told reporters. This would ease fears, allow companies to reopen and rush care for those who need it.
To get the hundreds of millions of test-kits produced, Bullard said the government should agree to cover all the costs of production and allow the firms to keep all the profits.
Without the government guarantee, companies might be wary about investing in test production. In the past, firms lost money when they ended up with warehouses full of unwanted test-kits after health threats had eased, Bullard said.
“By doing it my way, you’ll guarantee that they are going to make money and you’ll create a gold rush. By the time we get to the second half of the year, we’ll be swimming in tests and that will put the pandemic behind us,” Bullard said.
While the plan might sound like “pie-in-the-sky,” Bullard said the economy is already losing $25 billion a day as so many sectors of the economy have effectively shut down due to the social distancing quarantines put in place to contain the spread of the virus.
Bullard’s comments elaborated on an idea he first discussed earlier this month in an interview on CBS News’ “Face the Nation.” Bullard suggested the economy might be able to recover once people could take a coronavirus test every day and wear a badge if they tested negative.
U.S. equity benchmarks were trading higher on Friday on optimism that Gilead might be on the path for an effective coronavirus treatment. The S&P 500 index SPX, +1.82% was up 40 points or 1.5% in midday trading.