COVID-19 & the economyAcute & Chronic Economic Considerations of COVID-19
Just as the high probability of a pandemic was foreseen so, too, were the economic effects of such an event. COVID-19 is no black swan, nor is it an event for which we were not given warning shots. In the last three years, the U.S. intelligence community, the Council of Economic Advisers, the Department of Homeland Security, among other government agencies, specifically and in disturbing detail warned of the grave risk a pandemic would pose to U.S. health and economic wellbeing – with the U.S. intelligence community specifically warning of a “novel strain of a virulent microbe that is easily transmissible between humans continues to be a major threat,” and listed pathogens H5N1 and H7N9 influenza and MERS-CoV as potential culprits. Even as we weather COVID-19, the questions remain as to when, not if, the next infectious disease will emerge. We were unprepared for COVID-19, but, hopefully, we will learn a few lessons from it. Specifically, to better prepare for the next pandemic, we need a plan to sustain our economy at the individual, household, and firm levels so that we are not forced to shut down, accrue more debt, and, perhaps, never recover from the economic losses the outbreak causes.
The commonly recited statement that COVID-19 knows no bounds is not confined to its effects on individual or population health; it is also the instigator of our current and growing economic woes. Prior to COVID-19, it was well-established that an outbreak of a reemerging or novel disease with high communicability would ravage the U.S. economy, along with global economy. A combination of industry shut owns to reduce disease transmission and panic-induced risk averse behavior among consumers and producers turns a pandemic into a pestilence for the economic health of countries and their people. Just as the high probability of a pandemic was foreseen so, too, were the economic effects of such an event. As the Washington Post stated, COVID-19 is no black swan, nor is it an event for which we were not given warning shots.
Predictions
In September 2019, mere months before the arrival of the novel coronavirus in Wuhan, the Council of Economic Advisers published a report, which estimated the substantial health and economic losses the United States would face as a result of pandemic influenza, another highly communicable virus. In 2018, the Worldwide Threat Assessment of the U.S. Intelligence Community found that a “novel strain of a virulent microbe that is easily transmissible between humans continues to be a major threat,” and listed pathogens H5N1 and H7N9 influenza and MERS-CoV as potential culprits. Until bureaucracy-fueled abandonment in 2017, the Department of Homeland Security maintained annually updated models that estimated the infrastructural damage wrought by a pandemic. Beyond predictions, the 2019 Global Health Security Index forewarned the United States, as well as the rest of the world, that pandemic preparedness is lacking.
Warning Shots
Over the last decade, two other coronaviruses emerged in other parts of the world. The severe acute respiratory syndrome (SARS) epidemic of 2003 originated in China, but affected 26 countries and resulted in over 8,000 cases. In 2012, an outbreak of Middle East respiratory syndrome (MERS) originated in Saudi Arabia, but cases were confirmed in 27 countries. Both SARS and MERS originated from animal reservoirs and symptoms include those akin to influenza, much like COVID-19, but were very low risk to the US population. The 2014 Ebola virus disease outbreak was concentrated in West Africa; only 11 cases presented in the US. The aforementioned three epidemics barely touched the US population; however, localized outbreaks of Zika occurred in Florida, Texas, the U.S. Virgin Islands, and Puerto Rico in the
