3) Stomp on it hard so that the reproduction rate drops to significantly below 1.0 and the number of active cases is actually declining. Simultaneously expand testing infrastructure. When active cases have dropped to the hundreds (and undetected active cases have become insignificant), open up but with the handbrakes on, i.e. refrain from mass events for pretty much the rest of the year and open up the borders for e.g. family/friend visits with health checks in place but no mass tourism. If you have a very good idea who has it, it is enough to reduce the movements of those who have it. As long as you have no real idea who has it, reducing everyone's movements is the only safe bet.
If we stomp hard on it during the first wave, and if we make sure we have enough testing capacity to keep the numbers low once we've driven them down, by minimizing undetected infections to the 10s or 100s per month, then (and only then) can we return to a kind of normal that is economically viable for months or years (unless you're in tourism - tough luck!). A normal where schools operate in two shifts, a morning and an afternoon shift, to reduce class size, where the borders are open but mass tourism disencouraged, where working from home will be the default for most office jobs when no meeting is scheduled, use your imagination - but where production is up and running and you won't be scorned for visiting your friends.
The problem with your number (2) is that it sounds nice in theory, until you plug in actual numbers, like how long "doing what we do now" would have to be maintained, or how many people die along the road. When you do that, you quickly find it's simply not feasible. Sweden now has around 10,000 registered active cases. Let's assume that cases remain active for an average of 3 weeks, that the real number of cases is 10 times the official number, and that herd immunity is reached at 60%. In that case, it would take 60 3-week periods to get to herd immunity by "slowing the spread in a controlled manner". That's more than 3 years! More than three years with moderate restriction in place (they'd have to be somewhat stricter than what Sweden currently has, as the active cases are still growing), and possibly three years with 3-digit (or close) daily death counts. This. Does. Not. Work.
Stomp on it hard and test everyone with any chance of having contracted it when the numbers of active infections have become manageable works. It's what China did, and other countries seem to be on the right track: Australia, Thailand, New Zealand, Austria, maybe Czechia and Denmark.
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