The COVID-19 Pandemic and the $16 Trillion Virus
Larry Summers and David Cutler attempted this week to fathom the real cost of COVID-19 in terms of economic growth (and conversely assessing the magnitude of the downturn it entailed) but also factoring in the likely longer term health, social and societal impact of the pandemic on the United States.
With recessions "feeding on themselves" as the market economy comes to a halt with income droppings and more than 60 million unemployment insurance claims are logged as early as March 2020, the whole economy is in severe turmoil.
Where the analysis strikes a very concerning note is when assessing the combined financial costs of the virus for the sole United States, based on the economic impact but also the long term health consequences of COVID-19, estimating that:
Some individuals who survive COVID-19 are likely to have significant long-term complications, including respiratory, cardiac, and mental health disorders, and may have an increased risk of premature death. Data from survivors of COVID-19 suggest that long-term impairment occurs for approximately one-third of survivors with severe or critical disease. Because there are approximately 7 times as many survivors from severe or critical COVID-19 disease as there are COVID-19 deaths, long-term impairment might affect more than twice as many people as the number of people who die.
The arresting conclusions marry the total economic loss occurred because of COVID-19 (with an estimated total of USD16 trillion which verges on 90% annual US GDP) and the economic effects of "shorter and less healthy life" on the broader societal dynamics.
To read the full viewpoint: click here.