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Tuesday, April 21, 2020

Covid-19 Economic Damage (now with citations)

EDIT: now with citations!

The economy is wrecked no matter what.

We lock down and don't pay anyone: half the country starves (1).

We don't lock down: half the country gets hammered with HUGE medical bills that bankrupt them for life (5).

These are the two extremes and any variation of flattening the curve with releasing all restrictions to have another controlled wave of infection is only cycling between these two; it doesn't SOLVE anything, it just minimizes some of the damage and stretches the rest out from the initial indeterminate period to a longer indeterminate period.

So, we have to be truly honest right up front: there is no escaping economic devastation.

To stem the tide of massive starvation die-offs during the Great Depression the government spent HUGE volumes of cash it did not have. Creating these jobs was more expensive than just giving hand-outs but the psychological effect of working for the earnings rather than receiving charity was deemed more valuable than the extra cost.
The government INVENTED money and generated the work projects to get people out of their starvation trajectory (2).

That's what we have to do here. Will it cause massive inflation? Yup. It will. That's a future-us problem... but there will BE a future us to handle it. (3)

With an up-to 12% serious condition rate (6)(7) we are looking at half the country (4) is saddled under permanent medical care debt then there is no economy for them (5).

They won't be able to afford anything more than the most meager subsistence and that leads to individual economic ruin (8). What drives the economy as a whole? Consumerism (9)(10). With half the populace being able to buy anything due to crippling medical debt there is no consumerism and, therefore, no economy. It crashes. Inflation doesn't matter when all the businesses are going under because no one can buy their crap.

That's the thing about this situation - the rational, zero-sum math is now irrelevant.

So, tax the shit out of the billionaires whose entire fortunes are built on exploiting their workers. Tax them AND deficit spend to keep people alive. It's the least-costly way through this.

For example... let's use the worst-case estimates for deaths (because, if we just stop all measures and open everything for business, as usual, that is plausible)...

The mortality rate is 2-3% barring complications if people actually get the care they need (7). If we take the 2.5% mortality rate and multiply it against the US population (330million) we have a death toll of 6.6M people (11). That's assuming we are able to treat all of those who are sick properly. To do that requires flattening the curve (12), otherwise, the system will be overwhelmed and many more will die (13).

That's up to 6.6M deaths in the first go-round of this pandemic; there is evidence that reinfection can happen(14) and each new generation will have no inherent immunity.

59% of Americans have life insurance of some form(15).

It's estimated that most are under-insured(16) so let's guess REALLY low for the average insurance amount and call it $25k (16).

That means the life insurance industry, alone, will take at LEAST a $29.5B hit due to this pandemic.

Now, let's look at the bills for medical care. Reports of uninsured people getting hit with HUGE bills are popping up. They're in the $20k - $100k range (17). For the sake of minimizing the impact and easy math, let's call this $25k per person.

If 6.6M (2.5%) are DYING that means about 4x (2.5% x 4 = 10%; 10% + 2.4% = 12.5%) that amount are getting ill and recovering. So, for easy math, let's round that down to 33M having a serious illness that requires significant medical interventions.

For easy math let's also assume that the price tag is the same for the insured and uninsured (it's not).

That means that ~$25k * 33M people is the economic impact on the combination of people and the health insurance industry. So that's an additional $83T of economic damage. At an uninsured rate of 11%(18) that's more than $8.3T hitting the poorest people in the country and the rest bankrupting the health insurance industry. I have left out the additional medical cost of the people who died... but they will have incurred expenses, too... so keep in mind that these numbers are incomplete.

This is without even trying to calculate the impact of having massive labor shortages due to people being unable to work (the best-case scenario for those infected who get sick seems to be 2 weeks of intense misery with a two week recovery time; with some as many as 6 weeks of illness).
So let's do that... 33M people getting sick for 5.2 weeks (on average). The year has 52 weeks so 5.2 weeks is the easy math point to make it 1/10th of a year. The workforce in the USA is about 160M (20) and the virus does not discriminate between those who work and those who do not so let's do some more rough math and divide out the proportions. 160M / 330M is 48% of the population. 33M people is 20% of the workforce but only 10% of the overall population so lets do some more easy math and call the workforce half the population so we can cleanly halve the 33M to determine the economic impact of those people being out of work. So, 16.5M people afflicted out of 160M - roughly 10%.
10% of the workforce for 10% of the year is 1% of the overall output of the workforce as a whole.
On top of the previously stated economic damage due to the illness, we are looking at a 1% retraction of the GDP as a result of the illness. That's roughly $205B in economic damage. (21)

Now let's look at the huge cost of the funeral industry. This, like medical costs, is a sunk cost. It does not return anything of value to the economy as a whole; all of the products are one-time use and are, literally, buried or burnt up. No reclaiming value. Only the wages of those working in the funeral industry help drive the velocity of money, the rest is all a literal drain on the overall movement of cash. 6.6M ADDITIONAL deaths. Let's just go with the rock-bottom $1k per body (22) cost of processing each body (as an average) and ignore that the rich will spend WAY more and the middle class often spends 10x that amount. That's ANOTHER $6.6B hitting the economy... and that assumes that we have the mortician throughput to handle the deaths... which we don't.

So, let's round back on our options:

1. Lockdown and presume everyone has to fend for themselves on their savings. We incur massive starvations and deaths and economic collapse. With 50% (1) of people living in a situation where missing two paychecks means utter and complete disaster, this WILL be a problem. Let's say only half of those people die. That's 82M left in serious trouble and $207T of economic damage due to life insurance payouts and processing costs. It also means a reduction in the overall GDP of at least 25% as a quarter of the people stop consuming, which is another $50T.

2. We do NOTHING and let everyone get sick as fast as possible. This is the basis for all of the above. 6.6M dead, 4x that many needing medical care. A hospital system that cannot accommodate them all, leading to more deaths.

3. We flatten the curve through incremental openings and closings. This leads to all of the above as well, but over a 2-3 year period instead of in a single year. It does manage to reduce the peripheral deaths and the deaths of people due to being unable to get the necessary care so that ONLY the predictions above are valid.


4. We suck it up and pay people to stay home, taking the economic hit to subsidize the lockdown, thus reducing, but not eliminating, the GDP hit AND the medical and insurance devastation and the vast funeral industry boom... at a cost of $5.7T (23) direct cash outflow (that goes directly into the velocity of money so it keeps the economy humming where it is working).

Super short options version:
1. $257T of economic damage, 25% population loss, economic ruin for everyone who lives.
2. Worse than option one in every way.
3. Same as option 1 but spread out in time instead of all at once.
4. $5.7T in direct damage and an indeterminate level on indirect damage that is less than $207T, population loss at 12% or less.

Lots of people think the rational choice is to open up and let the economy go but it is NOT. Will debt-financing the general support of everyone crippled us for a couple generations? Probably. But it is still less damaging than the alternatives... it, literally, costs less and saves lives.


1. The number is uncertain as it is not a trackable metric due to a variety of factors but 50% of families being unable to cope with two lost paychecks is a reasonable, LOW-BALL, guess based on the evidence.
2. Multiple stages of economic intervention were implemented in an effort to prevent the total collapse of everything during the Great Depression.
3. General wisdom, and all evidence, indicates that established monetary theory rules the value of cash that is not backed by anything tangible. Our cash is not backed by anything tangible so creating new cash to face this crisis WILL deflate the value of the existing cash -
4. This is speculative. Medical debts don't vanish when someone dies, they pass into the estate. So, based on the disease rate, we have 12% of the population incurring MASSIVE debts, which spills over to affect their family and generate pockets of collective financial ruin. If each medical debtor has 3 others (typical family of 4) they drag down with them that is 4*12 = 48% of the population that is financially destroyed.
5. Medical bankruptcy is a very real, very American problem -
6. Up to 88% of people may be carriers without having symptoms.
8. Really? You need a citation for this? Google it. There are volumes and volumes and volumes on how too much debt and bad cash flow can utterly destroy an entity. But, if you need a citation - I cite myself as someone who has a Management degree and an MBA and who has climbed back from the pit of bankruptcy through careful application of sound policies.
9. Just one example. There are so, so many examples of this. That we measure out economic health using GDP is, itself, an indicator.
10. The fundamental concept for economic growth based on money moving around is, appropriately, called "the velocity of money." This is the concept that has been usurped by "trickle-down economics" and implemented incorrectly so as to make many doubt its truth. But it is real. The economy is NOT money, it is the MOVEMENT of money.
11. Flattening the curve:
12. Here is an estimate that is much more optimistic than my rough math; it predicts only 2.2M deaths.
13. I cannot find a good source to outline how much worse it will be if we don't do anything.
14. Reinfection is real.
15. Life insurance market penetration
16. Average life insurance amounts - - note, they say the average is $125k, which multiplies my figure by 5.
17. Covid medical bills: - I have seen more but cannot currently find them.
18. Uninsured rate - sources vary.
19. Corona virus recovery time:
20. Us workforce -
21. US GDP
22. Minimal death costs -
23. $2k / month for everyone in the workforce for 18 months - hopefully we can have an effective vaccine developed by then

Monday, March 2, 2020

Immunology and anti-vaxxers

I'm not a molecular biologist. I'm not an immunologist. I'm not a doctor. I'm not a pathologist. I'm not a lot of things relevant to the study of virology and how diseases work.

What I am, though, is inquisitive. I am logical. I reason.


The anti-vax movement disapproves of the removal of religious and philosophical exemptions from vaccinations within the state. Some people are against it on the grounds of government overreach but nearly all of them don't really understand how vaccines work nor do they understand their importance.

I encounter these people a lot in my internet meanderings.

Here is a summary of a recent conversation with one of them; I have been told by several people who are fancy-pants biology people who have degrees I can never attain that the below is a reasonable summary of an entire semester of college immunology.


First off, they claim they are not anti-vax and they launched their counter with the age-old "if vaccines work then why are you so worried about this if you are vaccinated?" (this question comes in many forms). I find this a tiring argument because it shows the level of science ignorance of the person and they are always smug about it, thinking it is the super "gotcha" argument that proves vaccines are worthless.


Let's have a crash course in this.

Mutations are the root of evolution. They are transcription errors in genetic information being copied during the reproductive process.

Mutations occur generationally, meaning that the change does not happen within a cell, but when a cell is replicating. In single-celled entities (like microbes) each division is a generation of the species, whereas within multi-cellular beings each cellular generation is of no significance to the overall species mutation rate, only gametes matter for multi-cellular beings.

Mutations can be one of three things: inert, beneficial, or detrimental (from the perspective of the organism that possesses the mutation). Inert mutations don't matter, they are just a difference; beneficial mutations help the organism survive; detrimental mutations limit the success of the organism.

Beneficial mutations succeed in reproduction faster than the others in microbes because each subsequent division is a whole generation and a whole opportunity to spread faster and farther.

Each host for a microbe population varies slightly. Each one provides slightly different conditions that favor or hinder the growth of a microbe. This is why different people experience different levels of illness when exposed to the exact same strains of a microbe. This is why treatments work in some people and are completely ineffective in others.

If microbes have no home then they have no opportunity to grow and thrive and... mutate.

When a population is 95% immune it is 95% impossible for a microbe population to even enter the situation and 95% impossible for it to spread.

Which such a spread limitation treatments can be much more focussed and effective because the resources are available to spend on eradication.

This is called herd immunity.

NOW we get into the answer to your question.

Herd immunity minimizes the spread of a disease by minimizing the number of hosts in which it can gain a foothold. It minimizes the number of differing environments that can each exert naturally selective forces on the disease. It limited the number of mutations that can happen to the strain of the microbe, limiting the net volume of variation and mutation that it can acquire.

THAT is why we are so worried about it despite vaccinations.

Because, if we dip too far below the 95% threshold, even as low as 90%, we open a sliver of our population up to becoming incubators and mutation factories.

We open up that sliver of the population to transport the microbes wherever they go and to spread it to the sliver of the population in those locations that are also not vaccinated.

Those differing geographic regions compound the level of environmental diversity created by different individual hosts and create even more diverse naturally selective forces to act upon on microbe population.

Now... let's do some real quick math here based on a bacterium that is well known, even if it doesn't have a ready vaccination for it because we have lots of ways of preventing sickness from it:
An e. coli bacteria has a generation of about 20 minutes. This means that if a single e. coli bacterium finds its way into a human host it doubles in number every 20 minutes. Each individual division is an opportunity for a mutation to occur.

Since the division is exponential this balloons up VERY quickly.
At the end of ONE DAY the number of e. coli cells in the host is an unmanageable number to type (2^720).
If those replications develop a more virulent, faster reproducing, or more lethal strain that is more successful in the host and able to spread to others then we have an outbreak that kills lots of people.
This happens. This is why we have e. coli scares even though simple hand washing and proper cooking techniques prevent the issue.

This same thing happens with EVERY disease. Vaccines work but they only work for existing strains and those similar enough to them for our body to recognize it. If a mutation happens that changes it just enough for our bodies' immune systems to no longer recognize it then EVERYONE, vaccinated or not, gets sick. The more infected hosts the more opportunities for such a mutation to happen; the more opportunities for such an infection to spread. The more opportunities for us to have created a new iteration of measles that we cannot treat with our current medications or which is just lethal enough to make treatments irrelevant altogether.

This, too, is happening. We have cultivated antibiotic-resistant strains of Staphylococcus (known as MRSA) which are now found in about 2% of the population; when it gets into their (or anyone else's) blood it becomes a lethal situation for more than 20% of the people infected.

The easiest and best, way to prevent massive disease outbreaks due to beneficial (to the microbe) mutations is to eliminate their ability to grow and thrive and reproduce and the easiest way to do that is.... TO VACCINATE EVERYONE

It might "just be wikipedia(1)" but it is well documented with primary sources in the bibliography at the bottom.

1. wikipedia has been, repeatedly, tested for accuracy against "real" encyclopedias and found to be more accurate AND have more detailed information (2).