We can all feel the pinch. Favorite watering holes have gone out of business. We can’t comfortably travel like we used to. Supply chains are a mess. Inflation is at 6.2%, the highest in 20 years (although not as high as in the 70’s when it hit 13.5% or during WWII when it was 18%). Unemployment rates are high, yet at the same time there are staffing shortages across the board. Many businesses that depend on direct involvement with customers, such as restaurants and hotels, have been particularly hard hit. Meanwhile, companies like Amazon and Chewy along with their delivery partners UPS and FedEx, are posting high earnings. It all seems crazy.
Hundreds of websites post up to the minute “death tolls” from the virus. However, getting a handle on the financial cost of the pandemic is much more difficult to find. So, what has been the financial impact of COVID? The Brookings Institution released a report in June, 2021, that estimated the world governments had collectively spent approximately $16 trillion in 2020 in response to COVID. That amounted to 15% of the entire global GDP. The result has been a deep reception that equals that experienced during World War II. Even if the pandemic fades over the next year, the financial ramifications are predicted to continue for another decade.
Of course, the economic impact must be considered in face of the number of deaths from the pandemic which is now a little over 5 million with about 788,000 in the US. For comparison, the 1918 influenza pandemic caused an estimated 30-40 million deaths in the first year and another 20 million in the second year. Another interesting comparison is the AIDS pandemic, the first cases of which were identified in 1981. AIDS has claimed over 36 million lives worldwide since then and continues to be a major cause of death. In 2020, approximately 680,000 died of HIV/AIDS.
I came across an interesting article, published in May, 2021, in the journal Nature, that asked the question of what motivates people more to support COVID mitigation efforts, their perceived risk of loss of lives or their perceived risk of economic impact. The answer was surprising. The study surveyed 25,435 people across 24 different countries. They found that people were more likely to support government health policies to contain the pandemic if they perceived that such health policies would ultimately protect the economy. There was a correlation between their personal perceived risk and what motivated them more, namely protecting the economy versus protecting lives. In other words, if a respondent felt that their personal risk of contracting COVID was low then their support for government policy that protected the economy was greater.
This balance has been the center of much heated debate. The other big debate being around the balance of personal liberty versus greater good of society. It seems to me that much of the discussion around supporting health initiatives, such as promoting or mandating vaccinations, has mostly focused on the argument that these measures save lives. However, for the large percentage of the population who do not feel personally at risk from COVID, perhaps a more effective argument might be to discuss the economic impact of the pandemic itself compared with the economic impact of the government mitigation efforts.
The analysis to determine whether it was all “worth it” will be argued a long time after COVID has come under control. Some will argue that, compared with other pandemics, the loss of life wasn’t all that great and the economic impact of the public health policies might not be justified. Others will counter with the argument that the loss of life was less because the policies worked and not despite them. In the end, I think about a famous quote by General Ike Eisenhower made shortly after the successful landing on D-day. To paraphrase what he said, despite all of the statistics, if that one person who died was you or a loved one, then the odds are 100% and all of the predictions of how things were going to go didn’t matter.
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