I have not seen a single serious attempt to model quite how expensive they will be
How about the fed's estimate of a ~5% hit to GDP in Q2.
The economic ramifications of the shelter-in-place are going to be massive.
How about the fed's estimate of a ~5% hit to GDP in Q2.
The economic ramifications of the shelter-in-place are going to be massive.
Put that way, it's a hell of a deal. Killing off 1% of the population, plus the economic damage of nobody wanting to go out because of fear of getting sick, and that's unimaginably worse than 5% for a quarter, economically. Of course there are are likely to be knock on effects for several quarters, but given the typical lifespan of a human, we could go several years of 5% less GDP before it would equal the economic cost of the loss of life. Not to mention the social cost, which is hard to assign a value to.
It makes me think of other comparisons. Imagine if we had terror attacks that killed 60,000 people a year if we worked to stop them, but several million people if we didn't work to stop them. How much did we decide to spend on wars in response to 9/11, and his manu soldiers of our own did we decide to kill in military actions, and how many foreign innocent civilians? It really puts 5% GDP into perspective, as almost a nothingness compared to what we willingly sacrificed in response to the last disaster, which had economic effects on top of that.
If we could coordinate a perfect shelter-in-place the outbreak would have been gone by now. If people don't cooperate with each other we will have a much prolonged outbreak.
Or in another perspective think about whether your comment is what you feel like saying or whether it is something that contributes to the discussion.
The US GDP is around 22 trillion a year.
Therefore each million >=60 year olds saved is worth completely shutting down the US economy for around three months.
1) Taking this https://www.cdc.gov/nchs/nvss/vsrr/covid19/index.htm and combining with SS Life Expectancy tables, the average years lost per death is ~12; that corresponds to the age of 72-73, not 60.
2) Even the most alarmist reports barely predicted million deaths in the worst case scenario.
3) How is lifetime value of 60 year old 5 million? Based on the same SS tables, that's for 21.5 years, so ~230k per year. Where is this number coming from?
3a) Using some objective standard like annual income, it would obviously be far lower.
3b) You can even use a personal take - would you rather have $5 million (translation: very safe ~$150-200k/year for life including childhood, so you never have to work while living an upper middle class lifestyle), and have a risk of death at 60 with a COVID probability for 60-year-old (~4% CFR or so, so lower IFR and even lower combined with non-100% infection rate), or have $0, live with a median job and income, and not have that risk? What about throwing out the "60-year-old" and taking the real average case, 72-73yo (with its increased CFR/IFR)? I'm pretty sure I'd roll that dice for as little as a $200-300k head start.
4) Moreover, disability adjusted life years and other similar metrics often (quite justifiably) weight later years of life lower than the earlier ones. Again, to make this more personal or less numeric, would you rather be paralyzed from neck down in your 30ies (and then remiss) or die at 80 instead of 85? I'd take dying earlier.
If it were even spread out through the year (it is not), a 5% hit in Q2 would be $250 billion in that quarter.
That's true. This is a serious attempt to model, and I did in fact hear about it, now that you remind me.