Former Oughout. S. Treasury Secretary Lawrence Summers and fellow Harvard University economist David Cutler argued in an essay upon Oct. 12 that the outbreak will end up costing the United States $16 trillion, around four situations the toll exacted by 2007–2009 Great Recession.
“Approximately half of this particular amount is the lost earnings from the COVID-19 -induced economic downturn; the remainder is the economic associated with shorter and less healthful life, ” the two economists wrote in a paper released in the Log of the American Medical Organization, in which they called the break out of the CCP (Chinese Communist Party) virus “the greatest threat to success and well-being the Oughout. S. has encountered because the Great Depression. ”
Estimates by Summers plus Cutler as to direct financial losses are consistent with earlier projections by the Congressional Budget Office, which forecasted the pandemic would, on the next decade, cost the us nearly $7. 6 trillion in lost gross household product (GDP).
In estimating the remainder from the $16 trillion virus strike to the United States, the two economists sought to gauge the cost of COVID-19-related premature deaths, long lasting health effects, and embrace mental health conditions. To gauge the cost of premature deaths, someone said they relied on the means of ascribing value to “statistical lives, ” which is approximately measure economists use which is based on how much it is really worth to people to reduce the risk of fatality or morbidity.
“Although no single number is usually universally accepted, ranges will often be used. In environmental plus health policy, for example , the statistical life is assumed to become worth $10 million. Using a more conservative value of $7 million per life, the particular economic cost of premature fatalities expected through the next year is certainly estimated at $4. four trillion, ” they published.
Among those which contract the CCP computer virus and survive, some probably have significant long-term wellness complications. The two economists believed around seven times as numerous survivors of severe COVID-19 illness as deaths which around one-third of survivors would suffer from long-term problems. They then estimated the cost of long lasting health impairment at $2. 6 trillion.
They also assumed that the twenty nine percentage points in extra reported cases of stress and depression since 04 compared to the same period within 2019 could be attributed to the consequence of COVID-19 lockdowns.
“These data translate for an estimated 80 million extra individuals with these mental health problems related to COVID-19. If, consistent with prevailing estimates, the cost of these types of conditions is valued around $20, 000 per individual per year and the mental wellness symptoms last for just one year, the valuation of such losses could reach around $1. 6 trillion, ” they wrote.
The total of these estimates relates to $16. 1 trillion, or even around 90 percent associated with annual GDP in the United States.
“Output losses of the magnitude are immense, ” they wrote. “The financial loss is more than two times the total monetary outlay for the wars the U. T. has fought since Sept 11, 2001, including individuals in Afghanistan, Iraq, plus Syria. ”
Policy recommendations in light of such conclusions, the two economists contended, include wide-scale population screening and contact tracing.
“A minimum of 5% of any COVID financial relief intervention should be dedicated to such health measures, ” they wrote.
“Increased investment in screening and contact tracing might have economic benefits that are a minimum of 30 times greater than the particular estimated costs of the investment decision in these approaches. ”