COVID COVID-19 Coronavirus Containment Efforts

[PeroK]

By comparing Sweden to similar countries they see that keeping things open longer didn't seem to help the economy. It's a cautionary tale that "we keep things open to help the economy" doesn't have to help the economy, and that tale you can apply worldwide.

In other words:

1) Compare Scandanavian countries (Sweden, Norway, Denmark, Finland).
2) Under no circumstances look at data from any other countries. Even the Netherlands and Belgium are considered fundamentally different countries, beyond any comparison with Scandanavia.
3) Apply the conclusions worldwide!

 

[russ_watters]

@russ_watters no one is suggesting that debt does not matter.

Nonsense. We were frequently told, often with visible aggression/anger, in these threads and in the public sphere, that it was immoral to even consider the economic impacts of the shutdowns, in the face of death.

But for the article specifically, I can only interpret what is there and speculate about why something wasn't there. At the very least it must be said that the author of that article did not consider debt to be a relevant/important enough economic impact to be worthy of consideration/mention in the analysis.

1. Does debt matter right now?

#1 is a straw man argument -- the question is if one does nothing, then the pandemic itself will cause greater economic damage.

No, that's a straw man premise because by definition, debt is always a "later" problem unless the current debt level is so high that nobody will lend you money (which isn't happening today). So what you are saying is that it is sometimes acceptable to not consider the long-term impacts of one's decisions. I disagree with the premise, so the question is moot. Or if you'd prefer the direct answer: No, in my opinion it is never acceptable to say debt doesn't matter right now.

the question is if one does nothing, then the pandemic itself will cause greater economic damage. So it is pick your poison -- get into debt to mitigate economic damage now, or do nothing and watch your economy tank (in addition to causing untold damage to the health of your population).

You said "question" and then made a statement. Are you asking or claiming that/if the pandemic itself will cause greater economic damage?

It seems self-evident to me that shutdowns cause more economic harm than an un-checked pandemic would, but it appears to me that you are saying you believe the opposite.

2. To what extent will it matter once the worst of the pandemic has peaked?

#2 will greatly depend on the degree to which nations around the world will work to stimulate the economy through fiscal and monetary policy, and the degree to which there will be pent-up demand for goods and services that are currently shut down (to varying degrees) due to the pandemic. I (unlike yourself) am actually quite optimistic that once the pandemic passes that the there will be enough robust economic growth to essentially wipe out the past damage and reduce or eliminate the debt accumulated during the pandemic.

That's fundamentally impossible, and it's the reason why countries take on debt in the face of recessions. The permanent loss is exactly what they are trying to prevent. If someone gets laid-off and loses 3 months of income, that's money they are not getting back, ever. It's 3 months of work experience they will never have, 3 months delay to their next promotion, etc. It's unreasonable to expect that being laid-off will cause a person's future income to increase to make up for it; it's the opposite of what the physical damage tells us should happen. Employees lose the 3 months of income and their future careers are damaged as well. This phenomena was studied and quantified following the Great Recession.

For products, "pent-up demand" also never fully recovers for companies. It's reasonable to say that if we can fully recover, everyone who delayed buying a car in the past 3 months will do so. But that's 3 months of aging of their cars that they aren't getting back. It is unreasonable to expect that people are then going to discard their next new car sooner to compensate.

Short term consumables and services are easier to see: Cancelled vacations are lost, and aren't coming back. Restaurant meals that were canceled and converted to cheaper at-home meals aren't coming back. Etc.

The effects you describe are opposite what the cause is pushing toward. I'd really like to know what forces you see that could cause improvements beyond the pre-COVID baseline.

 

[StatGuy2000]

Nonsense. We were frequently told, often with visible aggression/anger, in these threads and in the public sphere, that it was immoral to even consider the economic impacts of the shutdowns, in the face of death.

But for the article specifically, I can only interpret what is there and speculate about why something wasn't there. At the very least it must be said that the author of that article did not consider debt to be a relevant/important enough economic impact to be worthy of consideration/mention in the analysis.

First of all, in the realm of seriousness, death will generally trump economic impacts. And you also ignore that widespread death or serious illness of a population will have created negative economic consequences that will have exceeded the negative impact of the shutdowns.

No, that's a straw man premise because by definition, debt is always a "later" problem unless the current debt level is so high that nobody will lend you money (which isn't happening today). So what you are saying is that it is sometimes acceptable to not consider the long-term impacts of one's decisions. I disagree with the premise, so the question is moot. Or if you'd prefer the direct answer: No, in my opinion it is never acceptable to say debt doesn't matter right now.

No, I am not saying that is acceptable to not consider the long-term impacts of one's decisions. What I am saying is that in certain circumstances, there are requirements to act quickly in the best interests in both the health and economic impacts in the immediate present in the face of an extraordinary situation (which a pandemic clearly consists).

Questions of long-term impacts should be considered, but wise administrators and governments will be taking that into consideration once the immediate threat has abated. Various countries around the world, including Canada, has done this more or less successfully, gradually re-opening their economies and taking stock of what to do to mitigate the potential long-term impacts of previous necessary lockdowns.

You said "question" and then made a statement. Are you asking or claiming that/if the pandemic itself will cause greater economic damage?

It seems self-evident to me that shutdowns cause more economic harm than an un-checked pandemic would, but it appears to me that you are saying you believe the opposite.

It does not seem self-evident to me at all that shutdowns cause more economic harm than an unchecked pandemic, and to even suggest this is hard for me to believe.

An unchecked pandemic with hospitals and health care systems so overwhelmed will have a severe impact economically. Furthermore, the more people fall ill due to an unchecked pandemic, that's more cost in terms of lost productivity, lost wages, higher medical costs, etc. (Also keep in mind that people recovering from COVID-19 may potentially experience damage in terms of lung, heart, or even neurological damage, leading to lost work time and productivity).

That's fundamentally impossible, and it's the reason why countries take on debt in the face of recessions. The permanent loss is exactly what they are trying to prevent. If someone gets laid-off and loses 3 months of income, that's money they are not getting back, ever. It's 3 months of work experience they will never have, 3 months delay to their next promotion, etc. It's unreasonable to expect that being laid-off will cause a person's future income to increase to make up for it; it's the opposite of what the physical damage tells us should happen. Employees lose the 3 months of income and their future careers are damaged as well. This phenomena was studied and quantified following the Great Recession.

For products, "pent-up demand" also never fully recovers for companies. It's reasonable to say that if we can fully recover, everyone who delayed buying a car in the past 3 months will do so. But that's 3 months of aging of their cars that they aren't getting back. It is unreasonable to expect that people are then going to discard their next new car sooner to compensate.

Short term consumables and services are easier to see: Cancelled vacations are lost, and aren't coming back. Restaurant meals that were canceled and converted to cheaper at-home meals aren't coming back. Etc.

The effects you describe are opposite what the cause is pushing toward.

You are fundamentally misunderstanding the point that I am stating. Of course lost wages due to unemployment over the 3 months of the lockdown will not come back, nor canceled vacations, restaurant meals, services, etc.

What I am talking about is economic recovery once the pandemic has stabilized or passed. In other, the shape of the future. What I am talking about are future economic activity, as industries and businesses and households recover. Every recession in history has led to some form of economic recovery (from the Great Depression of the 1930s right through to the Great Recession of 2008-2010). Because life does not stop, and demands for products and services always come back.

What the shape and nature of the economic recovery will look like once the pandemic passes is hard to visualize. But the stronger the economic recovery, the greater this will lead to tax revenue coming into government coffers to pay down any debts incurred to mitigate the effects of the shutdowns. The stronger the economic recovery, the more jobs will be created to mitigate for those that were lost.

Follow-up note: @russ_watters , I'm frankly confused as to what you are ultimately trying to argue. Are you suggesting that the US and other countries around the world are doing the wrong thing in trying to stop the spread of COVID-19? What alternatives would you have done, if you were the president of the US, or a lawmaker in Washington?

It seems to me that you are arguing that the US or other countries should not have carried out lockdowns to stop or limit the spread of COVID-19, and instead to let the pandemic run unchecked.

 

[Jarvis323]

@Jarvis323: That's not what you can find in the abstract or the conclusions, and it disagrees with well-known statistics. And it still doesn't explain why they didn't randomize the groups, and why steroid use is so vastly different but doesn't get mentioned in abstract or conclusions. Well, there is one option that explains all these open questions together neatly: Deliberate manipulation - fraud. It's not the only option, but it does look likely to me.

It is an observational study. There are reasons for observational studies. They are what they are and have whatever value they have.

The conclusion they wrote:

Conclusions and Relevance
In this multi-hospital assessment, when controlling for COVID-19 risk factors, treatment with hydroxychloroquine alone and in combination with azithromycin was associated with reduction in COVID-19 associated mortality. Prospective trials are needed to examine this impact.

I don't know, maybe there is a lack of integrity? We should still review the study with integrity though.

 

[BillTre]

https://www.sciencemag.org/news/2020/07/can-boosting-interferons-bodys-frontline-virus-fighters-beat-covid-19?utm_campaign=news_daily_2020-07-08&et_rid=295682744&et_cid=3400349 is a Science magazine news article (reviews several studies) on using interferons to counter coronavirus.
They seem to have some promise.
They may have side effects.
Interferon I may have fewer side effects than interferon III.
Maximal effect is thought to be obtained by using them early in an infection, rather than later, when side effects may be worse.

 

[russ_watters]

Is an increase by only 1.9% spectacularly good as you said? It's much larger than the average of the Eurozone. It's only good if you compare it to the US or Canada, but that's telling us more about the US and Canada than Sweden.

Well, fair enough. Looking at long-term data on Sweden, it only went to just under 10% during the Great Recession and shows seasonal variation which makes it even harder to interpret (which we edit-out in the US):
https://tradingeconomics.com/sweden/unemployment-rate

So yeah, you're right that that's something you can't easily compare, and it's "spectacular" compared to the US based on different policies and measurement criteria. But remember: I didn't pick unemployment, you and the author did. In my opinion, income, GDP and debt are much better health indicators for the current situation (and usually overall) and especially given the fact that current policies have broken the unemployment statistics.

What I'd really like to see is something like:

• GDP Declined by 5%
• Government spent 5% of GDP on stimulus
• Total damage: 10% of GDP

 

[kith]

As I said, the bigger problem isn't the country-by-country differences in method/characterization, it's that the numbers themselves aren't real due to the type of economic stimulus given. If someone is at home and not working, but still being paid by their employer, they are "employed" even though they are not working and are not producing any output for the company. As far as I know, that's a type of stimulus that has never happened before [...]

It has: https://en.wikipedia.org/wiki/Short-time_working. It would be interesting to compare countries which did this during the financial crisis 2007-2008 with countries which didn't. There are quite a few confounders, though, which may be difficult to disentangle.

 

[Astronuc]

Karen Salazar’s mother was one of a rising number of Houston residents who have died of COVID-19 at home.
https://www.nbcnews.com/news/us-new...ts-its-hidden-toll-people-dying-home-n1233151

The previously unreported jump in people dying at home is the latest indicator of a mounting crisis in a region beset by one of the nation’s worst and fastest-growing Coronavirus outbreaks. On Tuesday, a record 3,851 people were hospitalized for the Coronavirus in the Houston region, exceeding normal intensive care capacity and sending some hospitals scrambling to find additional staff and space.

Many people who die at home are not tested for COVID-19, said Dr. Jeremy Faust, an emergency medicine physician at Brigham and Women's Hospital in Boston. In New York City, for example, only 16 percent of the 11,475 at-home deaths between February and June have been attributed to COVID-19, according to data from the U.S. Centers for Disease Control and Prevention.

 

[mfb]

In other words:

1) Compare Scandanavian countries (Sweden, Norway, Denmark, Finland).
2) Under no circumstances look at data from any other countries. Even the Netherlands and Belgium are considered fundamentally different countries, beyond any comparison with Scandanavia.
3) Apply the conclusions worldwide!

You realize that's exactly how scientific studies are done?

- have two groups that are as close as possible apart from one variable, look for differences between them to isolate the impact of that variable
- apply that result elsewhere

You don't test a new drug in every single hospital worldwide to see if it works. You test it in a few hospitals where one group gets the drug and the other one does not, while keeping everything else as similar as possible (unless you want your favorite drug to appear good, as discussed). If successful there you use the drug worldwide.

This is not limited to medical studies, you find the same pattern everywhere: You compare events at the Higgs mass with events with a different mass but identical behavior otherwise from the same detector. You don't use events from a different collider as direct comparison because you would drown in differences that come from the different detector instead of being sensitive to the Higgs boson. You find the Higgs boson? You then apply that result everywhere.

But remember: I didn't pick unemployment, you and the author did. In my opinion, income, GDP and debt are much better health indicators for the current situation (and usually overall) and especially given the fact that current policies have broken the unemployment statistics.

GDP projections were in the article as well.

 

[PeroK]

You realize that's exactly how scientific studies are done?

That's how newspaper articles are written!

 

[russ_watters]

First of all, in the realm of seriousness, death will generally trump economic impacts. [snip]

You've changed the subject and I agree with what you are now saying: One death/life saved is worth a lot of money, and it is reasonable to spend a lot of money/endure economic harm to save lives.

No, I am not saying that is acceptable to not consider the long-term impacts of one's decisions. What I am saying is that in certain circumstances, there are requirements to act quickly in the best interests in both the health and economic impacts in the immediate present in the face of an extraordinary situation (which a pandemic clearly consists).

Questions of long-term impacts should be considered, but wise administrators and governments will be taking that into consideration once the immediate threat has abated. Various countries around the world, including Canada, has done this more or less successfully, gradually re-opening their economies and taking stock of what to do to mitigate the potential long-term impacts of previous necessary lockdowns.

These statements variously contradict each other and/or your prior statement, alternating between it is and isn't acceptable to not consider the economics, by adding or not adding a delay. Either you are taking into account the long-term impacts *now* - when you make the decision - or you aren't. If you are taking them into account *later*, then you aren't taking them into account *now*, at the time the decision is made. In my opinion, that's foolish, and never a good idea.

[paste]
And you also ignore that widespread death or serious illness of a population will have created negative economic consequences that will have exceeded the negative impact of the shutdowns...

It does not seem self-evident to me at all that shutdowns cause more economic harm than an unchecked pandemic, and to even suggest this is hard for me to believe.

An unchecked pandemic with hospitals and health care systems so overwhelmed will have a severe impact economically. Furthermore, the more people fall ill due to an unchecked pandemic, that's more cost in terms of lost productivity, lost wages, higher medical costs, etc. (Also keep in mind that people recovering from COVID-19 may potentially experience damage in terms of lung, heart, or even neurological damage, leading to lost work time and productivity).

So let's try putting some numbers to it based on the current scenario for the USA vs a hypothetical no-response scenario:

Without shutdown, worst case (USA):
50% infection rate
2wk ave loss of work (that's probably high due to a near 50% asymptomatic rate)
80% of workers have paid sick leave/vacation
1 yr
=0.4% lost production/income/GDP (that's the employment impact on GDP only)

With shutdown and assuming effectively zero infection rate:
13% unemployment for 3 months (so far) vs 3.5% in Feb.
Annualized, that's 2.4% lost production/income/GDP

You may notice I didn't include deaths. 75% of deaths are in people who aren't part of the production economy (they are retired). And 100% of people who die are not included in per capita GDP anymore. So while total GDP could be lower by 0.125% ongoing (at a 1% death vs infection rate), the per capita GDP/income in a country should go up due to COVID deaths.

I also didn't include the cost of hospitalization. While hospitalization is a high personal cost, it isn't necessarily a high societal cost; it is a transfer. Hospitals/doctors/nurses make more money when more people are hospitalized.

I also didn't include the cost of government stimulus, since the "with shutdown" case is actually the true US outcome, which would have been worse without the stimulus, and the cost is in the trillions of USD. In other words, the damage of the shutdown is substantially worse than what I've been able to capture. The cost of the stimulus -- the delayed harm -- is substantially larger than 2.4% of GDP. But beyond saying "trillions" I haven't had much luck finding projections for the cost.

You are fundamentally misunderstanding the point that I am stating. Of course lost wages due to unemployment over the 3 months of the lockdown will not come back, nor canceled vacations, restaurant meals, services, etc.

What I am talking about is economic recovery once the pandemic has stabilized or passed. In other, the shape of the future. What I am talking about are future economic activity, as industries and businesses and households recover. Every recession in history has led to some form of economic recovery (from the Great Depression of the 1930s right through to the Great Recession of 2008-2010). Because life does not stop, and demands for products and services always come back.

Then I have no idea what point you are trying to make as pertains to what I said. Of course every recession has a recovery. So what? Nor does it seem in alignment with your prior statement, which seemed pretty clear-cut that it was the harm in the recession that could be undone retroactively: "essentially wipe out the past damage and reduce or eliminate the debt accumulated during the pandemic."

So I'll say it again, perhaps in a different way: Debt is future economic harm endured for the purpose of mitigating present economic harm.

[reversed order]
It seems to me that you are arguing that the US or other countries should not have carried out lockdowns to stop or limit the spread of COVID-19, and instead to let the pandemic run unchecked.

I certainly never have, nor never would say such a thing. But conversely, many of the claims made about the success of mitigation efforts are versus an "unchecked" scenario, which of course isn't even true in Sweden. But it is a convenient baseline to use when one wants to estimate a really big benefit for mitigation efforts.

Follow-up note: @russ_watters , I'm frankly confused as to what you are ultimately trying to argue. Are you suggesting that the US and other countries around the world are doing the wrong thing in trying to stop the spread of COVID-19? What alternatives would you have done, if you were the president of the US, or a lawmaker in Washington?

No, I'm not saying that. I'm saying the claim made in the article about Sweden vs everyone else (or just Scandinavia?) that the shutdowns caused no more economic harm than not shutting down is absurd. So far, that's it.

I've repeatedly declined to make a value judgement on this issue and only point out the absurdity of the prevailing view because the reality is really complicated and nuance isn't a strong component of these discussions.

But I will say now what my real preference is, which I've hinted at before: The vast majority of the world has approached COVID "wrong" [opinion/value judgement], and has chosen a path of both more health and economic harm than was necessary. And it's done so while hypocritically/falsely claiming to value life/health above all other considerations. In reality, by far the primary consideration has been avoiding an undefined privacy risk. Despite being undefined, a large fraction of the world - specifically the West - has decided that avoiding that privacy risk is worth enduring many thousands of deaths and an economic catastrophe. And we're going to continue on that course indefinitely. And I think that's just despicable. I'm really angry about it.

I'm speaking of course of the South Korean compulsory digital/automated mitigation model. Denmark was highly lauded in the article vs Sweden, but Denmark has so far endured twenty times as many deaths per capita with a shutdown than South Korea has had without a shutdown.

 

[russ_watters]

It has: https://en.wikipedia.org/wiki/Short-time_working. It would be interesting to compare countries which did this during the financial crisis 2007-2008 with countries which didn't. There are quite a few confounders, though, which may be difficult to disentangle.

Fair enough, but yeah, I'm not sure that's the same thing. Though I guess in theory the impact is the same when ultimately the government is paying the salary for people to not work, whether it is direct or through the employer. But still, I would expect people impacted by that policy aren't counted as "unemployed", so that could explain some of the reason for the USA's much steeper "unemployment" numbers vs Europe during this crisis.

 

[mfb]

Without shutdown, worst case (USA):
50% infection rate
2wk ave loss of work (that's probably high due to a near 50% asymptomatic rate)
80% of workers have paid sick leave/vacation
1 yr
=0.4% lost production/income/GDP (that's the employment impact on GDP only)

That's not the worst case. It's not even close to being the worst case. If so many people get infected in a short time you don't just have the hospitals overflowing. You have people looting whatever they can everywhere. Who is going to stop them? The police, half of them sick as well?
By the way: Why do people with paid sick leave keep contributing to the GDP while sick? What do they produce?

But this isn't a realistic scenario, of course. The more infections there are the more people avoid crowded places on their own. We have seen this pattern in every place where lockdowns came relatively late: People reduced going to crowded places (and spending money there) before. You get an economic damage simply from people being concerned about their health - a perfectly reasonable concern.

the per capita GDP/income in a country should go up due to COVID deaths.

Clearly an indication of success!

 

[Vanadium 50]

I'm really angry about it.

You know what makes me angry? Why is it worth trillions of dollars to mitigate Covid and not 0.1% as much to end malaria (which kills a million or two people a year)? I'll tell you why. People who get malaria are poor, black and brown and live far away. Important people get Covid. Rich people. White people. New Yorkers and others living in the rich part of the US.

You know what else frosts me? New York is quarantining people from Utah, the state ranked #44 in Covid deaths. While they say it's "science" that tells them to do it, we all know that its' NY not approving of Utah's (limited) opening up. They are not quarantining people from Massachusetts or Washington DC, which have much higher case and death rates. And it's not like New York is in any position to be lecturing anyone else on their response, since they deliberately - by policy - sent infected to nursing homes. If it were Charles Taylor or
Radovan Karadžić who did this, we'd be dragging their sorry butts to The Hague.

 

[russ_watters]

That's not the worst case. It's not even close to being the worst case. If so many people get infected in a short time you don't just have the hospitals overflowing. You have people looting whatever they can everywhere. Who is going to stop them? The police, half of them sick as well?

What? It's not half getting sick simultaneously, it's half getting sick over the course of a year. You're pretty much describing a societal collapse, and that's just ludicrous.

New York city has already come close to this scenario, where if the 1% death rate holds, they've already had 25% of the population infected (in 4 months). It wasn't fun, but it wasn't anywhere close to societal collapse.

By the way: Why do people with paid sick leave keep contributing to the GDP while sick? What do they produce?

People produce nothing while sick, but that's already been subtracted-out of their annual productivity. In essence, they either go on vacation and produce nothing or stay home sick and produce nothing...though in the "lockdown" case, many are staying home doing nothing for their vacations too.

But this isn't a realistic scenario, of course. The more infections there are the more people avoid crowded places on their own. We have seen this pattern in every place where lockdowns came relatively late: People reduced going to crowded places (and spending money there) before. You get an economic damage simply from people being concerned about their health - a perfectly reasonable concern.Clearly an indication of success!

Absolutely correct. It varies from country to country, but the "no government mitigations" case does indeed include significant personal, volunatry mitigations. That's one of the reasons the early, scary "no lockdown" models were never realistic and why the predictions about Sweden were so badly overblown. Thanks, we'd been arguing about that for months!

 

[Vanadium 50]

New York city has already come close to this scenario, where if the 1% death rate holds, they've already had 25% of the population infected (in 4 months).

And if the CDCs 0.26% holds, 100% were infected. They're done!
However, it's not that simple. New York imported some of their sick. People outside NYC went to hospitals inside NYC and died there.

 

[russ_watters]

However, it's not that simple. New York imported some of their sick. People outside NYC went to hospitals inside NYC and died there.

I'm not so sure that's a significant confounding factor. New Jersey is not far behind NY by that math (18%) and I think the death stats are by state/county of residence, not death. It explicitly says so for PA stats, for example.

 

[Ygggdrasil]

So let's try putting some numbers to it based on the current scenario for the USA vs a hypothetical no-response scenario:

Without shutdown, worst case (USA):
50% infection rate
2wk ave loss of work (that's probably high due to a near 50% asymptomatic rate)
80% of workers have paid sick leave/vacation
1 yr
=0.4% lost production/income/GDP (that's the employment impact on GDP only)

With shutdown and assuming effectively zero infection rate:
13% unemployment for 3 months (so far) vs 3.5% in Feb.
Annualized, that's 2.4% lost production/income/GDP

One major flaw in your analysis is that it assumes that the economic downturn is due solely to the shutdowns and stay at home orders. In reality, the pandemic caused people to stay at home in most places well before governments issued stay at home orders. This conclusion comes from examining GPS tracking data from people's phones to determine their mobility in the period before and after the institution of government stay at home orders in various US states. This is also consistent with anecdotes about declines in restaurant reservations in the weeks before the issuance of stay at home orders and closing of indoor dinning. It is likely that many sectors that are already in economic trouble due to the shutdown (airlines, restaurants, sports, entertainment, etc) would be in similar dire straits due to the pandemic, even in the absence of government shutdown orders (I know I was already avoiding bars and restaurants before the stay at home order in my state). The US is also not isolated from global economic forces. Regardless of US policy, economic shutdowns in other countries would also have negative effects on the US economy (e.g. the sharp decline in oil prices harming the US oil industry).

There is also historical data from the 1918 flu pandemic suggesting that stronger responses to the pandemic yielded better economic recovery after the pandemic, which directly contradicts the assertion that shutdowns cause more economic harm than an unchecked pandemic. If the pandemic is the underlying cause of economic problems, then measures that are able to contain the effects of the pandemic will be effective in stemming the economic harms from the pandemic.

Indeed, data from the 1918 influenza pandemic are quite informative for the present time. For example, they show that cities that let up on their social distancing measures too early will experience a resurgence of the disease:

https://www.washingtonpost.com/outl...stancing-must-continue-longer-than-we-expect/

As always, history repeats itself.

 

[mfb]

It varies from country to country, but the "no government mitigations" case does indeed include significant personal, volunatry mitigations.

... which come with significant economic consequences. If a place loses 90% of their customers, then forcing it to close loses at most 10% more.

 

[russ_watters]

One major flaw in your analysis is that it assumes that the economic downturn is due solely to the shutdowns and stay at home orders. In reality, the pandemic caused people to stay at home in most places well before governments issued stay at home orders.

... which come with significant economic consequences. If a place loses 90% of their customers, then forcing it to close loses at most 10% more.

True! The two scenarios are near opposite ends of the spectrum of the chosen paradigm (for the West, anyway), and various countries made choices along the spectrum. I didn't choose the endpoint, it was chosen for me (and not just today, but repeatedly over the past few months).

I'd much rather choose a paradigm/scenario 90 degrees opposed to it, where there are few lockdowns and few deaths, but almost nobody wants to talk about that...

[edit] Here's a visual of what I'm referring to:

 

[bhobba]

But the real problem with the article's analysis is that it lacks the word "debt".

Yes in Aus we are keeping Covid under control, and the economy is not doing horribly bad (just bad) by means of large amounts of debt. It looked like we heading to recovering and starting to pay off some of the debt, but then things got really bad in Victoria, but I will do a separate post about that. Where I am in Queensland the boarders just opened and tourists by the ton are arriving - that will help the economy enormously - but police etc must really be on watch for any rule breaking - already quite a few have been reported. Of course Queensland has a lot of income from mining which helped both Queensland and Australia's debt situation. Still it is expected we will have about a Trillion in debt when this is over. There is one small consolation - Queensland's Public Service was becoming really bloated - this has forced some downsizing - but in a responsible way. We had one premier who did it in one big hit and got walloped at the next election.

The question is debt or lives. I choose lives - debt, especially at our current low interest rates, can be paid back - a life never can.

Thanks
Bill

 

[bhobba]

For the latest on the second wave we have in Victoria Australia caused by the security guards very lax behaviour in the hotel where overseas arrivals were quarantined:
https://www.couriermail.com.au/news/national/virus-outbreak-at-altaqwa-college-linked-to-covid19-crisis-at-public-housing-towers/news-story/8ef515f5602ffac7da8160ee31f1d506?utm_source=CourierMail&utm_medium=Email&utm_campaign=Editorial&utm_content=CM_BREAKING_CUR_02&net_sub_id=311202432&type=curated&position=1&overallPos=1

I know we do not discuss politics here but the Premier is doing every trick in the book to avoid taking responsibility. For example he set up an enquiry into the security guard situation. Everyone knows what happened, it was caused by the police union contacting him and saying we are not babysitters - get someone else to do it. When reporters call him to account - no comment - it's under investigation. I am afraid that would not work with me - I would call out the obvious tactic in front of the Premier and demand he explain himself. But for some reason they do not. Interestingly on the few occasions I have seen those type of tactics not 'accepted' by reporters, it always ends badly for the politician.

Thanks
Bill

 

[russ_watters]

The question is debt or lives. I choose...

You chose the question.

 

[StatGuy2000]

These statements variously contradict each other and/or your prior statement, alternating between it is and isn't acceptable to not consider the economics, by adding or not adding a delay. Either you are taking into account the long-term impacts *now* - when you make the decision - or you aren't. If you are taking them into account *later*, then you aren't taking them into account *now*, at the time the decision is made. In my opinion, that's foolish, and never a good idea.

Perhaps I wasn't clear about what I was trying to communicate earlier, so let me rephrase it this way.

What I was trying to argue was that in a middle of an emergency, there is a trade-off between rapid action with potentially serious costs in the long-term, versus no action with immediate costs. In such a scenario, I would choose the rapid action to mitigate the immediate costs, while being aware of what could be the potential long-term costs. There is nothing contradictory about this at all, and frankly I find it puzzling why this would be at all a controversial point.

So let's try putting some numbers to it based on the current scenario for the USA vs a hypothetical no-response scenario:

Without shutdown, worst case (USA):
50% infection rate
2wk ave loss of work (that's probably high due to a near 50% asymptomatic rate)
80% of workers have paid sick leave/vacation
1 yr
=0.4% lost production/income/GDP (that's the employment impact on GDP only)

With shutdown and assuming effectively zero infection rate:
13% unemployment for 3 months (so far) vs 3.5% in Feb.
Annualized, that's 2.4% lost production/income/GDP

You may notice I didn't include deaths. 75% of deaths are in people who aren't part of the production economy (they are retired). And 100% of people who die are not included in per capita GDP anymore. So while total GDP could be lower by 0.125% ongoing (at a 1% death vs infection rate), the per capita GDP/income in a country should go up due to COVID deaths.

I also didn't include the cost of hospitalization. While hospitalization is a high personal cost, it isn't necessarily a high societal cost; it is a transfer. Hospitals/doctors/nurses make more money when more people are hospitalized.

I also didn't include the cost of government stimulus, since the "with shutdown" case is actually the true US outcome, which would have been worse without the stimulus, and the cost is in the trillions of USD. In other words, the damage of the shutdown is substantially worse than what I've been able to capture. The cost of the stimulus -- the delayed harm -- is substantially larger than 2.4% of GDP. But beyond saying "trillions" I haven't had much luck finding projections for the cost.

The hypothetical costs you outline above for an unchecked pandemic are flawed in several ways:

1. First, to achieve herd immunity in the absence of a vaccine will require that about 60-70% of the population will need to have been exposed or infected with SARS-COV2 (the virus that causes COVID-19). So the 50% infection rate you specify is an underestimate.

2. I'm assuming that the 2 week average loss of work is taken from the rough period of recovery from COVID-19. But you are not taking into account the wide variability in recovery time, given that some (if not many) patients who have "recovered" from COVID-19 (i.e. those who are no longer infectious) continue to exhibit symptoms for weeks or months after they cease to be infectious. In fact, there have been reports of COVID-19 patients who have experienced respiratory, cardiovascular, and (in some cases) neurological damage. These patients will require far more than 2 weeks to be able to fully recover from these serious symptoms, which will prolong their recovery period and will impact work productivity, costs of rehabilitation, etc.

3. You quote a 50% asymptomatic rate. I'm not sure where you pulled this number from, since as far as I know, there is still no good estimate of the actual asymptomatic rate for COVID-19 (I've heard quotes from 25%, but not sure what the latest data).

4. You also fail to take into account that the loss of GDP isn't based solely on loss of productivity from people getting sick. An unchecked pandemic will also spark fear and anxiety in the wider population (afraid of contracting the illness), which can manifest itself in many ways, including loss of spending in areas like, say, restaurants, bars, etc. So the loss in GDP will extend far beyond what you had estimated earlier.

5. You state above that hospitalization is not a societal cost but a transfer. At an individual level, perhaps that is true, but what you fail to take into account is what happens when hospitals are overburdened with a flood of COVID-19 cases (as what happened in Italy). In such a scenario, we have seen where doctors and nurses are forced to triage patients to determine who lives or dies due to lack of beds, resources, etc., leading to many people dying that could have been saved. In addition, people suffering serious medical conditions are no longer able to have medical provided due to all resources being tied up with COVID-19 cases. This has a clear societal cost, in terms of greater death, but also in loss of productivity due to a substantial number of these people being unable to work, etc.

6. You mention the cost of the stimulus due to the shutdowns. I acknowledge that this is costly, but again, if the economy is severely impacted due to an unchecked pandemic, I would argue the government will eventually have to carry out some form of stimulus anyways. So shutdown or not, any such scenario would have been equally costly. At least if the US had an effective quarantine and lockdown, followed by appropriate and effective testing and contact tracing and widespread mask-wearing (as has finally emerged in Canada), then the US would have been able to re-open their economies to mitigate the effects of the shutdown.

Then I have no idea what point you are trying to make as pertains to what I said. Of course every recession has a recovery. So what? Nor does it seem in alignment with your prior statement, which seemed pretty clear-cut that it was the harm in the recession that could be undone retroactively: "essentially wipe out the past damage and reduce or eliminate the debt accumulated during the pandemic."

So I'll say it again, perhaps in a different way: Debt is future economic harm endured for the purpose of mitigating present economic harm.

The point I was making is that as the economy recovers, then governments will be able to pay down or off the debt they have accumulated to mitigate the present economic harm. I don't see why this is at all hard to understand -- if I borrow money now with the promise I will pay back that money later, and I've saved enough money from my new job to pay off that debt, then the harm of my being indebted disappears.

I'm speaking of course of the South Korean compulsory digital/automated mitigation model. Denmark was highly lauded in the article vs Sweden, but Denmark has so far endured twenty times as many deaths per capita with a shutdown than South Korea has had without a shutdown.

South Korea was able to have a compulsory digital/automated mitigation model largely because that country (along with many other Asian countries e.g. Taiwan) was severely impacted by the 2003 SARS outbreak, and learned from that important lesson to invest heavily in public health measures.

Western countries like the US did no such thing, and have thus suffered the consequences of this. Hence the need for lockdowns, etc. Perhaps a lesson for future pandemics (which will no doubt occur).

 

[bhobba]

You chose the question.

Fair enough - propose another.

Thanks
Bill

 

[kith]

Fair enough, but yeah, I'm not sure that's the same thing.

At least in Germany, it is very similar. Employed peopled are supported by exactly the same mechanism as during the last financial crisis (the one I linked to). There are additional measures which weren't taken back then (direct monetary help for self-employed people, easier access to unemployment benefits, consumer tax cuts).

But still, I would expect people impacted by that policy aren't counted as "unemployed", so that could explain some of the reason for the USA's much steeper "unemployment" numbers vs Europe during this crisis.

I agree with your basic point that it's difficult to compare countries right now because of differences in government spending. That's why I suggested to use the last financial crisis as a test case and compare how countries, which used policies like the one I linked to, did compared to countries which didn't use such policies. If I find the time, I'll look into this.

The difference between spening a lot now in order to give people financial security and spending little now are second-order effects. Sick people going to work because of fear of losing their jobs probably prolongs the endemic and increases its costs. Sound businesses going bankrupt is also a net negative; on the other hand government spending might subsidize bad businesses.

 

[russ_watters]

Fair enough - propose another.

Death or undefined privacy risk?

 

[kith]

Death or undefined privacy risk?

Could you elaborate on the second part? Do you have successful examples in mind (like the digital part of China's strategy?) or are you speaking hypothetically? Do you include mandatory apps?

 

[bhobba]

Death or undefined privacy risk?

Sure - analyse it through that paradigm if you like. Ultimately in a democracy the people decide. Privacy is a concern here in Aus - but as possible death comes more to the fore privacy recedes somewhat. For example people are now saying, including even me, fine and arrest those just exercising their privacy to protect the rest of us. An example is those refusing to take Covid tests. That is their legal right, but the push now is, not to take away that privacy, but to fine and force them into lockdown in a hotel at their own expense. Actually the government through biosecurity legislation can force them to take the test, but do not want to go that far - yet.

Thanks
Bill

 

[russ_watters]

Could you elaborate on the second part? Do you have successful examples in mind (like the digital part of China's strategy?) or are you speaking hypothetically? Do you include mandatory apps?

Yes, I'm talking about South Korea.