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Is financial impact of Coronavirus “medicine” worse than the disease?

The economic impact to the US (not to mention the world) is now being measured in trillions of dollars as a result of our Coronavirus response. Hundreds of thousands of people (if not more) are now or will end up losing their job, which can lead to food insecurity and countless other challenges. Is what we are doing to fight the Coronavirus, is the “medicine worse than the disease”.

Is putting 100% of the population through financial hardship and human suffering a good trade off for protecting 10-20% of the population from getting sick (with potentially hundreds of thousands dying)?

Obviously things are changing by the day. While it may be hard to do when there is mass hysteria, please stick with me and try to take emotions out of it and think of the big picture as you read below; Think logically.

Last month, over 10,000 seniors died in the US from a health condition (that does not include worldwide deaths). That stat and this condition scares me. No, I am not talking about Coronavirus, but Alzheimers. And we as a nation barely do anything about Alzheimers and the 120,000 mostly older people it kills per year. Coronavirus has killed a fraction of that number of people in the US (with of course more to still die). But is our reaction to Coronavirus, the “medicine worse than the disease” itself?

World wide, we have had under 10K deaths from Coronavrisus, with a couple thousand of them in the US. So what are we doing about it in the US? Shutting down the US economy to the tune of trillions of dollars in direct cost, less revenue for the government as the result of plummeting economic activity, and trillions more in market losses. Is the medicine of shutting down the economy, which is impacting 100% of Americans with millions losing their jobs (and who may struggle to feed their kids, pay their bills, etc.) worth the cost of the fighting the Coronavirus (“the disease”).

In 2017, about 55,000 American died of influenza and pneumonia in the US (that does not include worldwide deaths). That scares me. Thousands of innocent people die each year from other drivers texting and driving or DWI. I could go on and on with stats of people dying at huge numbers from things that are out of their control. And what do we do about those tens of thousands of hundreds of thousands of deaths? Nothing.

Alzheimers kills over 120,000 Americans each year who are over the age of 65. Over 40 million people in the world have Alzheimer’s, with about 5.5 million of them being Americans. In the US alone, an additional ~15 million people “care” for those Alzheimer’s patients. That number dwarves the number of coronavirus patients. What do we do as a society? Ummm….nothing other than spend a few billion dollars for researching a cure (thanks mostly to the drug companies). Coronavrisus –The US alone will end up spending trillions…not to mention worldwide costs.

Is the financial and human cost (the “medicine”) for Coronavirus worth it?

To date, under 300K people across the word have been diagnosed with coronavirus and under 10K killed. The good news (yes good!) is that many experts say potentially hundreds of thousands of additional people have coronavirus but they show few or no symptoms so they do not even know they have it. That fact in itself is great news, as if there are hundreds of thousands of more people un-diagnosed with Coronavirus it brings down the fatality rate. The fatality rate in South Korea, which has arguably the best response to the virus per most experts, is about .5%….which is equivalent to a horrible annual influenza period….but that is all it is…a bad flu season.

What we are doing for coronavirus as a world and nation is stunning….our medicine to the virus is unprecedented. Trillions in direct cost, countless job losses, and 100% of the US is “suffering” as a result of our response.

While the data on Coronavirus is still evolving, the average age of death in Italy in 80 years old. No one under the age of 39 in Italy has died. Most experts say people 60 and older are most at risk, and the data supports that. The impact is skewed towards seniors, which is similar to Alzheimers.

Think about our reaction to coronavirus. Literally the economy is shutting down for weeks if not months. The US government is talking about spending over 1 trillion in direct cash payments to businesses and people. Government revenue will also drop sharply, to the tune of hundreds of billions if not trillions. This means a direct financial cost of trillions of dollars in the US alone.

Hundreds of thousands of people are and will lose their jobs. Moms and dads will struggle to feed their kids or keep the lights on. Some people who are super healthy may lose their homes. Small businesses that have been around for decades may and will close overnight. There is tremendous human suffering as well for those who are not impacted by the virus. People can and more than likely will die from the “economic fallout”, not from the coronavirus virus.

I really could go on and on. What is the cost to society, both in trillions of dollars spent as well as human cost due to the economic crisis we are causing? As 100% of the population is now suffering for about 10 to 20% of the population that would be most at health risk from Coronavirus. Should that be the case?

Other possible medicines?

I have no idea what the answer is. But I am surprised that no “talking head” or article even touches on the subject or even asks the question. No one seems to wonder or ask the question as to whether laying off so many people 9as a result of shutting down the economy) and indiscriminately spending trillions of dollars is the best option? As that also has tremendous negative consequence both on the human suffering level (for the families that lose the ability to support themselves) as well as a financial impact.

Could we have done something more thoughtful, to both keep the economy from not collapsing “as much” and “mostly” protect the most vulnerable at the same time? Like limit restaurants or movie theaters to say 50% capacity vs. shutting them down? Give cash grants to the sick and elderly and tell them to stay home until a vaccine is developed (which will take months) so that the high risk people can be safe and compensated. Note that would have cost us a fraction of the trillions we will be spending now and also kept people employed.

Maybe not herd people into grocery stores but limit the number of people who can go into them at one time, and “force” people waiting in line to give a few feet separation? Limit access to nursing homes or hospitals, which even as I type hospitals still have visitors. Take temperatures of people before they go into factories, and give sick time instead of shutting factories down.

Once again, is the financial and human suffering we are causing, is it worth it as we fight the Coronavirus? Is the medicine worse than the disease?
As after all, even if we shut things down for say 2 weeks, the virus does not “vanish”. It is still there. Then what happens after 2 weeks…everyone goes back out on their merry way and spread it again and we are back to where we are right now? Or do we do more common sense suppression things in 2 weeks?

Who knows the answer, but I am SHOCKED at the lack of discussion around this topic. Is countless people losing their jobs and trillions spent worth saving X lives from Coronavirus? Is making families food insecure, maybe losing their homes, etc. worth saving X?

But I have learned a lot about panic and mass hysteria from professionals and reading, and during periods like this it is all but impossible to “slow down the stampede”. So the herd shuts down the economy.

I strongly suspect that at sometime in the future, people will look back at this time and our response and ask was our extreme solution (“our medicine”) of shutting down the economy due to the Coronavirus worth putting 100% of the population through financial and human suffering? Or could something more thoughtful, less extreme have been almost as effective without all the hugely negative economic consequences we are facing?

joncmac

Jon McNamara is the CEO of needhelppayingbills.com, a company that he started in 2008 and that specializes in helping low income families as well as those who are in a financial hardship. He also found NHPB LLC, a company committed to helping the less fortunate. Jon and his team also provide free financial advice to help people learn about as well as manage their money. Every piece of content on this website has been reviewed by him before publishing and many of the articles he has personally written. Jon is the leading author for needhelppayingbils.

2 thoughts on “Is financial impact of Coronavirus “medicine” worse than the disease?

  • April 14, 2020 at 7:34 pm
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    Alzheimer’s disease is very important, of course, without question. But can we think about it if we die from a coronavirus? Because coronavirus affects everyone and does not apply, except for infants and young children. What will we do if not everyone has immunity to this disease or is it not so strong? According to preliminary estimates, this virus can infect half of the world’s population in a couple of months. If no action is taken in this regard. And the same old people will suffer from this (according to the statistics you provided). Therefore, yes, I think it’s worth spending a lot on it now.

    Reply
  • April 18, 2020 at 10:54 am
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    Hi Lisa,
    We agree Coronavirus is bad and life is precious. While it is a moot point now, as we noted back in March when we wrote this Coronavirus post, was there a better solution, such as keeping businesses open but have or a third of capacity? Such as stores or restaurants? Maybe enforcing people keep faces covered, even using something like bananas, etc. Enforcing social distance? Telling the vulnerable to stay home? Or some combination or other ideas.
    As it was clear to us back then that shutting down the economy would cause unprecedented economic harm. As right now 20 million people+ have lost their jobs (many jobs which may never come back at least in same fashion), thousands of people lost businesses maybe that they have run for generations, etc. People are lined up for miles at food banks. And as a nation we have also spent 2.5 trillion dollars and counting. Now once again, we do not know the answer, but it does seem we want from one extreme (open society of “dirty”, careless Americans who can barely wash their hands after bathroom) to another extreme (of shutting down economy at cost of trillions of dollars and financial hardship for millions of families). Could there have been some mid-point in dealing with COVID-19?
    But it is all irrelevant now….as it is too late. We did what we did as a nation.

    Reply

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