Which has caused more harm so far, the virus or people’s reactions?
For the US, it looks comparable. unless I’ve missed some zeroes somewhere:
130K deaths, median age 80, $4M/death = $540B.
.25Y lockdown, 10% GDP loss, GDP $20T/Y = $500B.
This is just for the simple question of “So far, for the USA, what are the costs of the virus and the cost of the response?”
I ignore the cost of being sick, and of treatment, and just look at deaths.
I ignore the longterm costs of the response, e.g., inflation, people staying out of the labor force once they leave it, small businesses going bust and not reopening later, reduced education of children. And I ignore the non-GDP costs of the response, e.g., loneliness, suicide, mortality from delayed medical care, reduced volunteer work, fear, effort to wear masks, reduced recreational activities, reduced churchgoing.
$4M/death is a compromise between the $10M standard and $.2M/year which seems to be about what is used, and the median age of death being 80 and somebody in worse than average health for an 80-year-old. It might be way too high.
Testing, tracing, protection of vulnerable populations, and vaccines are far cheaper and more effective policies than lockdown, of course, and economists have been saying this over and over to no avail. We didn’t have to create mass panic like we did, any more than we had to ship sick people to nursing homes to kill the other residents there, the New York State policy. People don’t seem to realize that if this is a real epidemic– which is becoming questionable, since the predictions of it have failed and the virus seems to be mutating into nothingness– we are all going to get it eventually: it’s just a question of when.
Most of the lockdown cost is from self-lockdown, not from what the governors have done, some economic studies say (I haven’t checked to see how good they are). My point remains: so far, the response has caused more harm than the virus. It’s like in the 1918 Spanish Flu, where healthy young people caught the virus and died because they had especially robust immune responses, which overreacted and killed them, but older people, with less immune response, survived. There are lots of illnesses like that, where your immune system going crazy is what causes the harm to your body.
On GDP impact, one paper is:
“The VSLY estimates used by the U.S. Department of Health and Human Services have risen from $116,000 (U.S. Department of Health and Human Services,1998) to $369,000 (U.S. Department of Health and Human Services, Food and Drug Administration, 2016).”
Life expectancy is about 10 years at age 80, from https://www.annuityadvantage.com/resources/life-expectancy-tables/.
Employment fell from 157,828 JUne 2019 to 142,811 in June 2020, about 10%, from https://ycharts.com/indicators/us_monthly_ .