Jonathan Shaw in Harvard Magazine:
THE FINAL TALLY OF ECONOMIC DAMAGE caused by SARS-CoV-2 will have to wait for the pandemic’s end, but in the meantime, two eminent economists have estimated the cost in the United States alone at $16 trillion. Eckstein professor of applied economics David Cutler, an expert on health care, and Eliot University Professor and president emeritus Lawrence H. Summers, former U.S. Secretary of the Treasury, lay out the grim prognosis in a Journal of the American Medical Association article: “The SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2) pandemic,” they write in a Viewpoint, “is the greatest threat to prosperity and well-being the U.S. has encountered since the Great Depression.”
The costs through the fall of 2021, assuming the pandemic is largely controlled by then, break down as follows:
- $7.6 trillion in lost economic output, according to estimates by the Congressional Budget Office;
- $4.4 trillion in losses due to premature deaths (assuming a relatively conservative statistical value of $7 million is placed on each life lost, and that current trajectories continue, which would lead to 625,000 cumulative deaths associated with the pandemic through next year in the United States);
- $2.6 trillion in health-care costs associated with long-term complications among survivors;
- $1.6 trillion in increased mental-health costs attributable to the pandemic if the mental-health effects last just a year.
Cutler and Summers point out that their total, $16.2 trillion, is approximately 90 percent of the annual GDP of the United States, and far exceeds the costs associated with conventional recessions in this country.