You can't run a national economy with half of your workers stuck at home and not producing - OR CAN YOU?

Here we are about a month into the recognized part of the COVID-19 pandemic in the United States, and we are looking at at least a month and a half of "social distancing", and ironically, the more successful we are at social distancing, the longer the economic disruptions will last before there is "herd immunity."  We are only about two weeks into the mandatory closure of schools and businesses, and people are justifiably worried that the lack of people working and generating income will cause an economic catastrophe.

The fundamental thing that most of us get intuitively is that with half of us not making money, and not spending, how do you keep the entire economy from falling down like a house of cards.  Can you run the United States economy with one hand tied behind its back?  I argue that yes, you can, and yes we have already done it. We did it for four years during World War II. 

In World War II, we had full employment, but half our economic output was going into the war effort. We were producing at maximum volume, and yet, as far as our domestic economy is concerned, half of that production did nothing to benefit the domestic economy.  What if we pretended for the sake of economic planning, that all those people staying home because of social distancing were simply producing weapons that we weren't using, or they were part of our expeditionary force, which happened to not be fighting? 

The economy survived, and to a certain degree thrived because people were bringing in wages.  Those wages were paid directly or indirectly by the government. The government paid for these wages by raising taxes, selling war bonds, and deficit spending.  We also had rationing of certain items and price controls. 

There was nothing inherently wrong in the 2 trillion dollar emergency spending package that Congress passed in its first attempt at addressing this crisis; but what has to be done is to plan an economy over the next year and a half that looks a lot like the economy we had in World War II, but the difference will be we won't actually produce weapons we don't need.  We will, however, produce on an emergency basis all of the things that we find we do need, and if the excess labor is available, we build stored value from that labor in the form of long term public works progress which turns our current expense into long-term assets. 

There are some signs that some countries get this concept. Canada is planning on paying its citizens a stipend of $2,000/month, for example.  We have to get over the mental hump that not only is this possible, that it is sustainable over the likely course of this pandemic.  I think there is not better way to get people over this hump than to point out that not only can it be done, we've done it before, right here in the United States.