I wrote this post on a discussion forum back April 12th, but I never published it here. Even with the stay-at-home orders ending nationwide, I still get plenty of questions about how I stack up their benefits — lots of lives saved — against the economic costs, which are utterly massive. Even now, a month later, with 35 days of hindsight, much of this analysis still makes sense, so I’m posting it even though chunks of it are already dated.
Question:
…So what happens in the real world while we’re waiting for that vaccine to come along? Unemployment skyrockets. As bills don’t get paid, businesses collapse, reducing the number of jobs even available to those unemployed, and it spirals from there. In short, a bad economy on par with some of the greatest depressions in history. I’ve seen unemployment projections north of 30%… that’s unprecedented in the last 120+ years in the US.
Now. Are you willing to argue that “it’s only money and lives matter more”? Or are you willing to acknowledge an economy on that level of bad is going to carry some real human costs and that, as one economist put it “it’s not lives vs. money, it’s lives vs. lives”?
If the former, then I don’t think I can take you seriously, as it leaves you with only your original half-an-argument. If the latter, then there’s the start of a real conversation about what to do.
At what point and in what way do you start factoring quantitative economic considerations and, by extension, qualitative quality of life considerations?
My answer:
This is a fair question, and it deserves something like an answer — even though it’s exceedingly, exceedingly difficult to quantify economic loss, much less quality-of-life loss. This is nearly impossible even after the fact, much less before the fact. But the fact is, not a single one of us would shut down the world like this in order to save 1 life. We wouldn’t even do it to save 100. (If we would, then we wouldn’t allow cars to exist. 37,000 people die in car accidents every year in the U.S. alone.)
On the other hand, there is really very little I would not do if I knew it would save, say, 5 billion people, including half the people I know (possibly including me). Presumably, if this were a plague set to kill 5 billion people, you’d all agree with me. To save 5 billion lives, yes, we would shut down everything for 18 months, lock us in our houses, have police deliver bad food, and arrest anyone who walks out. The alternative is simply too horrible.
The problem with this particular plague is that it lands somewhere in the middle: when all is said and done, unless the data is very wrong (and I hope it is), covid will likely kill between 5 million and 50 million worldwide. You MIGHT get through this epidemic without knowing any victims. We have to figure out where the line is. What are we willing to do for 5 million people that we aren’t willing to do for 5 people? What are we willing to do for 5 billion people that we aren’t willing to do for 50 million?
Complicating this, a great many people simply don’t want to believe this thing is as bad as it is, and are grasping at straws to convince themselves it’s not so bad. (I’m not thinking of anyone on this board, but I still have quite a few Facebook friends in the “models are lying it’s just a flu” camp.)
There is no good way to assign a dollar value to lives lost. But the current consensus is that the average American voter, when making policy decisions, values one life at about $8-9 million. (There’s also a one-year rate.) This calculation is flawed in a lot of ways, but it’s what we’ve got.
The U.S. economy is worth about $20 trillion.
Let’s accept that, regardless of what we do, pandemic makes major recession inevitable. People will die, supply chains collapse, consumer spending will vanish, it’s a nightmare. So let’s say, with the moderate measures Armus suggests, we lose 10% of GDP next year. (That’s several times larger than the Great Recession.) $2 trillion vanished in goods and services, taken from all of us, especially the poorest.
Let’s then assume that taking extreme measures makes things twice as bad. We lose 20% of GDP. It’s three years of the Great Depression all packed into one hell year. $4 trillion gone.
If those assumptions are true (and they’re not — they are at best in the ballpark), then it means that our additional safety measures need to save at least ($2 trillion / $9 million =) 222,000 American lives in order to be economically “worth it”.
At this time, based on currently available data, it appears to be the case that strong stay-at-home orders, nationwide, followed by intense disease surveillance (mandatory testing, contact tracing, quarantines), will save on the order of 1 million lives in the U.S. alone. (That’s compared to a modest mitigation strategy. It is an even bigger number if compared to a do-nothing strategy, which nobody is proposing.)
Recent discoveries about r0 and asymptomatic spread are adjusting that downward somewhat (covid may well be on the optimistic end of fatality estimates), but not far enough to change the math.
Of course, if we are wrong, it’s an exceedingly costly mistake. But that’s true either way. We have to make a call based on the knowledge we have and accept that we will make mistakes and that some future armchair quarterback will mock us for not knowing today what we won’t discover until July. But we have to do what we can to minimize mistakes. Right now, the best we can do is lock it all down until May, reassess based on what we know then… and then probably (but not certainly) renew the lockdowns. Another option would be to lift it in May and reimpose lockdown in June or July as cases start to rise again. The other option appear to be prayer (or hope, if you prefer) — hope for a treatment, for a cure, [for a summer respite,] for absurdly and unexpectedly high asymptomatic infection rates, or for some other kind of stupidly lucky break.
P.S. All the above is very cold-blooded arithmetic. But I admit that I came up with it long after making my decision. The actual, emotional, gut-level moment when I decided, “yes, we have to do this” was when I realized that, if we didn’t do it, the bodies in every single U.S. city and small town would show up so fast, and in such great numbers, that we would have to bury them in mass graves.
So you can talk all you want about my math, and I think that’s probably a good thing — it provides a way of rationally discussing the pros and cons of an impossible situation — but I discovered during this pandemic that my actual line is “mass graves”.