Various people, mainly but not exclusively in the Murdoch Press, are still complaining about the cost of the lockdowns and other restrictions imposed to control the Covid-19 pandemic. But most of these people seem to think that, in the absence of the controls, we would have avoided the economic costs, without any additional deaths (or, for the more hard-nosed, with only some expendable old people who would have died soon anyway). So, I thought I’d fill the gap by doing a comparison of the actual outcome with a baseline case: no government-imposed restrictions and no economic policy response.
In the baseline case, international and interstate borders would remain open and decisions on social distancing would be left up to individuals and business. Based on international experience, I’d expect lots of public events to be cancelled, international tourism to drop to very low levels (since most countries would impose quarantine on tourists returning home from a hotspot), and a big decline in activities like eating out. That would reduce deaths compared to a “no change” simulation, but also imply a lot of economic damage.
For an estimated number of cases, I’ll start with the US, where limited and inconsistently applied restrictions have so far seen 6 million recorded infections (with limited testing). That’s 2 per cent of the population. Allowing for the fact that we are about 6 months in, for undetected asymptomatic cases, and for the absence of any formal restrictions in the baseline scenario used here, I’d estimate 8 per cent of the population (about 2 million people) infected in the first year. The fatality rate would be at the upper end of those observed in overseas outbreaks, given overloading of hospital facilities, so I’ll put that at 1.5 per cent or 30 000 deaths, with maybe 100 000 people experiencing long term health effects.
Now lets look at the economic impacts. The immediate reduction in economic activity would be smaller than with the lockdown, but the absence of fiscal stimulus would make largely offset that. In addition, the health burden of the pandemic would disrupt all kinds of economic activity And, in the absence of JobKeeper reductions in economic activity would translate directly into business failures and unemployment with predictable multiplier effects. So, we could expect measured unemployment higher than under current circumstances (7.4 per cent), although less than the sum of measured unemployment and JobKeeper beneficiaries. And the unemployment benefit would be at the pre-JobSeeker rate, which is impossible to live on for long. Almost certainly, the suicides which were predicted as a result of the lockdowns (but did not happen) would have occurred in this scenario. By contrast, the actual outcome has been a reduction in poverty as those already unemployed benefited from JobKeeper and the end of robodebt
To sum up, the baseline case would involve vastly more death and suffering for no economic benefit to the community. The one positive in this case, is that the impact on the budget would have been smaller. That would have permitted the government to push ahead with tax cuts for high-income earners scheduled for 2024-25 (they may still do this, but it will be a lot harder to justify).
So, here’s an invitation to any lockdown opponents. Feel free to challenge these numbers. Or, propose a policy alternative that you are willing to defend.
John Quiggin 
The comparison would be tighter if you allowed for an economic policy response when people made their own decisions about safe distancing and other virus-evasive measures. The comparison is a bit slanted as it is. There would always be a fiscal response whether or not the induced recession was caused by voluntary responses or government-imposed lockdowns.
It seems to be mainly an issue of relative health costs. This is complicated. As many have said the policy effort is a marathon, not a sprint. Health responses and the comparisons you make over a one-year time horizon will be misleading if a reliable vaccine does not arise for years and herd immunity never develops so a community remains vulnerable to infection indefinitely.
The end of robodebt was coincidental to the pandemic. It was going to end in any case (in so far as it has).
Guest worker numbers would be higher in the base case driving the risibly measured unemployment higher than it is. However as it is, the number of ordinarily uncounted unemployed that have been counted due the increased Jobseeker rate being more worthwhile to bother claiming has also increased measured unemployment.
Guest worker numbers in employment, and in total remaining in the country looking for work,…
Harry, I’m doing the baseline. As I said, anyone who wants to modify it is free to do so.
Smith9, one feature of the shift to JobSeeker was the temporary relaxation of compliance policies for which robodebt is an emblem.
https://sciblogs.co.nz/infectious-thoughts/2020/08/25/why-covid-elimination-remains-the-best-game-plan-for-nz/
JQ,
The shift from jobactive to JobSeeker was mere coincidence occurring prior (~1 month?) to the relaxation of compliance policies and mandated jobactive/seeker activities and “mutual obligations”. The relaxation of compliance and the increase in payment by way of the supplement were in fact part of the later wider economic response to the pandemic when Slomo and Friedandburnt were finally forced to realise some of the looming consequences of their up to then lack of appropriate response to the pandemic.
Robodebt as a form of debt raising formally, and only in part as applying to limited dates, was abandoned later due to court actions and Senate processes already in train that left Slomo no other option but to drop what he gave birth to and fake an apology in vain hope of a still ongoing court proceeding being dismissed, or at least reducing a final damages award. Threats, and resources for compliance investigation, enforcement, and debt recovery by other than robodebt means were increased just the same. The discontinuance of robodebt, as far as it went, is not a product of the pandemic, nor is it a product of the shift to JobSeeker. It would have occurred under Slomo’s prior jobactive regime, it would have occurred regardless of the pandemic occurring, and the robodebt regime is unchanged for pre 2016 alleged debts so raised.
30,000 deaths occurring in just the first 6 months would crack Australia right open! Society in the lucky country is way too soft now, too inured to a relatively good and easy life to not react very poorly. There would be bloodshed.
Setting aside some specific effects arising from the different geographic locations of Australia and Sweden [1], JQ’s hypothetical results in a scenario which is consistent with the experience in Sweden.
These results do not include the reduction in CO2 emissions and the reduction in noise pollution.
[1] eg number of tourists in 2018: Australia 9.3 million, Sweden 7 million; length of summer (no statistics required for this one).
Setting aside some specific effects arising from the different geographic locations of Australia and Sweden [1], JQ’s hypothetical results in a scenario which is consistent with the experience in Sweden.
These results do not include the reduction in CO2 emissions and the reduction in noise pollution.
[1] eg number of tourists in 2018: Australia 9.3 million, Sweden 7 million; length of summer (no statistics required for this one), to name a couple.
sorry, I posted twice the same post.
Brazil’s early policy was also close to inaction, and at the federal level still is, apart from a cash handout. Eventually, as in the USA, state governors stepped in and imposed a patchwork of controls.
Somalia is the usual test case for a country that does not have a working government. https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Somalia So, far, it’s not doing too badly (1,557 active cases and-July in a population of 16m). Of course, it doesn’t have an economy resembling a First World one either: people just carry on as before.
Rather unimpressive. “Various people, mainly but not exclusively in the Murdoch Press, are still complaining about the cost of the lockdowns and other restrictions imposed to control the Covid-19 pandemic. But most of these people seem to think that, in the absence of the controls, we would have avoided the economic costs, without any additional deaths (or, for the more hard-nosed, with only some expendable old people who would have died soon anyway).”
Really? Name names. Don’t be intellectually lazy by working with innuendo and fake arguments.
I didn’t name names because I don’t want to get into slanging matches with people claiming they’ve been misrepresented, or complaining about pile-ons. It’s perfectly possible to analyze the costs and benefits without personalizing the issues.
The point is, I do not know anyone who argues “that, in the absence of the controls, we would have avoided the economic costs, without any additional deaths.” No one. Nevermind, “most of these people … .”
“..when people made their own decisions about safe distancing and other virus-evasive measures”
The problem with this is that your decision may not be consistent with the decisions of others and could be difficult to enforce.
JQ, on your third paragraph.
Source for “100 000 people experiencing long term health effects”?
As to the infection fatality rate, you seem to be off by an order of magnitude at least. True, the rate can vary substantially across locations and may reflect differences in population age structure as well as quality of health systems but the best estimates I have seen for unstressed health systems seem to assume that it is somewhere between 0.05 and 0.1 percent: https://www.medrxiv.org/content/10.1101/2020.05.13.20101253v3
Doctor Aortmann, SARS-CoV-2 kills roughly 1% of people who get it here. If it only killed 0.1% everyone in New York would have had it twice.
Why don’t you read the link, Ronald? And pay attention to my caveat, “the best estimates I have seen for unstressed health systems seem to assume that it is somewhere between 0.05 and 0.1 percent.” The initial public-health response pretty much everwhere has been to avert the health system being overwhelmed (as it clearly was in Wuhan, Lombardy, New York/NJ, etc.) …
The US death rate so far is 0.06 per cent of the population (already above your lower bound even on the assumption that everyone has been infected). My estimated death rate, for a full year and with no restrictions is just over 0.1 per cent, so it’s very conservative.
Of course, you could increase the number of cases, and lower the case fatality rate, by looking at seroprevalence, as Ioannides does. But that doesn’t change the death rate as a proportion of population which is what matters.
Trump made this same mistake, https://www.msn.com/en-us/money/other/trump-bragged-that-the-coronavirus-case-fatality-rate-is-lower-in-the-us-than-in-europe-but-thats-only-because-so-many-americans-are-sick/ar-BB171FmF
Doctor Aortmann, I was going to suggest you read the link, but I couldn’t think of a way to put it that didn’t seem a bit rude.
Yup, what does Ioannidis know.
And tell me again, why is the death rate as a proportion of population of the US – a country massively failing in its pandemic response — the relevant benchmark? (Today Brazil has the dubious honor of having surpassed Sweden in deaths per million, and the US will have accomplished that feat in two days max.)
Would not Germany, with a current death rate of less than one fifth of the US one, be a much better benchmark? For what current death rates are worth …
https://theconversation.com/sweden-eschewed-lockdowns-its-too-early-to-be-certain-it-was-wrong-143829
I know McDonald, rudeness is your middle name. I go back to my policy of not responding to anonymous posters.
“And tell me again, why is the death rate as a proportion of population of the US – a country massively failing in its pandemic response — the relevant benchmark? ”
Because the point of the post is to assess the death rate in the absence of any policy response, as a baseline for comparison.
To repeat, I do not know anyone who argues “that, in the absence of the controls, we would have avoided the economic costs, without any additional deaths.” No one. Nevermind, “most of these people … .”
As I said, I’m not interested in picking fights with particular people. I’ve seen lots of people complain about the costs of lockdown, but not evaluate it against an alternative. In the post I showed that doing nothing at all would have been worse than the actual policy. If someone wants to specify an alternative policy, and do the comparison, this provides a starting point. That was the invitation at the end of the post. So far, no takers.
Guest workers. Two to three million at least… taking one job at a time…
1) That majority of foreign students and spouses working here to pay off travel, accommodation, and course fee debts entered into prior to their coming were treated more harshly by the JobKeeper regime than some Australian resident citizen workers in similar employment situations who at least had JobSeeker &etc., if their employer could not swing JobKeeper.
Foreign student and spouse guest worker numbers would be higher without JobKeeper, and other economic responses to the pandemic. Many of those guest worker foreign students could therefore be expected to continue to afford their debt servicing, their costs of living in Australia, and their course enrolments meaning not so many academics and other university employees would have lost jobs given that the unis could (would?) also defer loan repayments on the stupid amount of debt their high priced drongo administrations have taken on in the belief that Ponzi schemes don’t end.
“What does Ioannidis know?” Well, since he wrote, “Infection fatality rates ranged from 0.00% to 1.63% and corrected values ranged from 0.00% to 1.31%.” It looks like he knows SARS-CoV-2 can kill a lot of people.
Let’s see, New York State has 19.5 million people and has had 33,000 official COVID-19 deaths. Just going from that, if every one in New York state has had it, then SARS-CoV-2 kills 0.17%. If we instead assume 20% have had it, then it kills 0.85%. Fortunately, or rather, horribly, more people may have been infected than that. So in the US they seem to be going with a figure of about 0.7% carking when infected with the virus. Looking at excess deaths, I suspect the COVID-19 death toll is higher than the official figures, but no one’s paying me to look into it so don’t be surprised if my work is sloppy.
aortmannphd says:
SEPTEMBER 2, 2020 AT 10:29 AM
To repeat, I do not know anyone who argues “that, in the absence of the controls, we would have avoided the economic costs, without any additional deaths.” No one. Nevermind, “most of these people … .”
Probably should be written as “that, in the absence of the controls, we would have avoided the economic costs, with additional deaths.”
Tony Abbott could be named . He favors business as usual and allowing the elderly to die ” naturally ” from Covid .Odd for a pro-life anti euthanasia fundamentalist. He has put the case for an attempt to protect the capitalist classes short term interests in fiery culture war terms .Even with time and the might of the vast majority of wealth and power behind the effort I am not sure that approach would sway enough public opinion on Covid like it could for Trump on ” law and order “. Popular voluntary public behavior changes in the face of pandemic would be enough to ensure recession without government mandated lockdowns anyway. The economy was on the ropes before Covid .
Having realised their full policy implementation dreams over the last 4 decades Conservatives have nothing left to do but keep the other side out of power. Since their ideology is inherently unpopular ,unfair and un-democratic they have to play dirtier and dirtier to do so, making deals with the devil .Someone in my street has moved out so I have been reading the Australian newspaper that is still getting delivered there .It is calling for Morrison to bring forth a bold new plan to lead the nation out of the wilderness .The plan involves ,tax cuts ,slashing regulations ,and labour market “flexibility” – oh dear .
Cajones!
…” For instance, an antibody-prevalence study in Geneva estimated an IFR of 5.6% for people aged 65 and older4. This figure was lower than were estimates in Spain, which comes to about 7.2% for men and women aged 80 or more, and in England, which found an IFR of 11.6% for people aged 75 or older.”
…
“But “age cannot explain everything”, says Henrik Salje, an infectious-disease epidemiologist at the University of Cambridge, UK. Gender is also a strong risk factor, with men almost twice more likely to die from the coronavirus than women. And differences between countries in the fatality estimates for older age groups suggest that the risk of dying from coronavirus is also linked to underlying health conditions, the capacity of health-care systems, and whether the virus has spread among people living in elderly-care facilities.”…
https://www.nature.com/articles/d41586-020-02483-2
Dumb cajones.
“Why the United States is having a coronavirus data crisis
“Political meddling, disorganization and years of neglect of public-health data management mean the country is flying blind.”
https://www.nature.com/articles/d41586-020-02478-z
Numbers are reasonable. I would say the comparison case is Sweden, which looks like it will end the year with 600 deaths per 1 mil, so Aus equivalent would be approx 15k (i.e. 30k seems too high). That would be 165k years of life lost compared to the 10k that will occur in Australia if lives lost at the end of the year are around 900 as expected.
That additional loss of years of lives would thus be around 3 times the total years of life lost due to motor vehicle deaths in Australia last year (1200 deaths x average of 38 years lost). It is approximately the years lost to driving deaths in 1975.
Motor vehicle deaths could be eliminated by 99% if we chipped every car to have a speed limit of 20km/hr.
A relevant comparison: are the human, educational, economic costs of the lockdowns and border closures (over and above what was institute in Sweden) more than three times as bad as the human costs of limiting all driving speeds to 20km/hr? If we did so, it would take an extra 8 hours to drive to your holiday house a few times a year, an extra 15 mins to drive to work each day. Many would switch to trains, mitigating the time loss. Unemployment would rise by … .2% perhaps? Budget deficit of an additional .5% of GDP?
Does that sound a third as high a cost to welfare as keeping all the students at home, randomly giving out permanent scarring shocks to high school, university graduates? To me it sounds nowhere near a third as bad. Yet we have never even considered it.
Would like to hear your thoughts.
It looks like the death rate for COVID-19 is about 1.0% on current estimates.
https://www.worldometers.info/coronavirus/coronavirus-death-rate/
That’s ten times worse than the average flu season at about 0.1%. That’s he equivalent of ten different bad flus all circulating at once, if that were possible.That’s not to be sneezed at. (Bad pun intended.)
COVID-19 deaths are not just the very elderly likely to die in a year or two anyway. Many COVID-19 deaths involve elderly but not completely decrepit people, plus people with pre-existing conditions plus front-line medical staff and other workers, plus even some young people and children. The total loss of economically useful, socially useful and personal quality life-years is enormous.
“A new study using a statistical measure called “years of life lost” (YLL) found that on average, those who died from COVID-19 lost more than a decade of their life to the disease.
The recent study conducted by researchers at the University of Glasgow in Scotland, which has yet to be peer reviewed, found that the average male who died from COVID-19 lost about 13 years of potential life, while women who died from the coronavirus lost about 11 years.” – thehill dot com.
At Wellcome Research the actual paper can be found:-
“COVID-19 – exploring the implications of long-term condition type and extent of multimorbidity on years of life lost: a modelling study [version 1; peer review: 1 approved]
Peter Hanlon, Fergus Chadwick, Anoop Shah2, Rachael Wood, Jon Minton3, Gerry McCartney,
Colin Fischbacher, Frances S. Mair, Dirk Husmeier, Jason Matthiopoulos, David A. McAllister
“Abstract
Background: The COVID-19 pandemic is responsible for increasing deaths globally. Most estimates have focused on numbers of deaths, with little direct quantification of years of life lost (YLL) through COVID-19. As most people dying with COVID-19 are older with underlying long-term conditions (LTCs), some have speculated that YLL are low. We aim to estimate YLL attributable to COVID-19, before and after adjustment for number/type of LTCs.
Methods: We first estimated YLL from COVID-19 using standard WHO life tables, based on published age/sex data from COVID-19 deaths in Italy. We then used aggregate data on number/type of LTCs to model likely combinations of LTCs among people dying with COVID-19. From these, we used routine UK healthcare data to estimate life expectancy based on age/sex/different combinations of LTCs. We then calculated YLL based on age, sex and type of LTCs and multimorbidity count.
Results: Using the standard WHO life tables, YLL per COVID-19 death was 14 for men and 12 for women. After adjustment for number and type of LTCs, the mean YLL was slightly lower, but remained high (13 and 11 years for men and women, respectively). The number and type of LTCs led to wide variability in the estimated YLL at a given age (e.g. at ≥80 years, YLL was >10 years for people with 0 LTCs, and ❤ years for people with ≥6).
Conclusions: Deaths from COVID-19 represent a substantial burden in terms of per-person YLL, more than a decade, even after adjusting for the typical number and type of LTCs found in people dying of COVID-19. The extent of multimorbidity heavily influences the estimated YLL at a given age. More comprehensive and standardised collection of data on LTCs is needed to better understand and quantify the global burden of COVID-19 and to guide policy-making and interventions."
Abbott’s intervention (usurprising, given that he’s a climate denier) came just after I wrote this post. But I’ll give him a shoutout on Twitter.
I am not so sure that many argue that, without controls, we would have avoided all economic impact and not increased deaths at all.
I am very sure that many argue that all economic impact is from controls alone. Apart from the (numerous) Murdochrats, instance Tony Abbott in London overnight, contending that there’s a simple choice between economic impact and controls. Instance the prominent economists associated with the Wellby and similar measures, who continue to assert that economic consequences other than from controls are negligible (or, as a backstop, are due to other people’s economic controls).
People who want to argue that there are no economic consequences of letting infection rip have to contort the obvious comparisons between Sweden and the other Scandinavian neighbour states, and between neighbouring USA states with and without significant control measures. All such comparisons show that economic impact absent control is commensurate with, or worse than, economic impact with significant control (though the latter is more front-end-loaded).
Deaths are very substantially worse absent control. And the evidence for long-term medical complication, probably at about four times the rate of deaths, is substantial. Demanding chapter and verse, as does aortmannphd, is mere handwaving for something so widely known.
Many of the serology claims about wider incidence are mere wishful thinking by those who seek to reduce some version of the death rate. But those exercises which are more rigorous and have larger samples, like the Spanish survey, suggest wider incidence much at the lower end: around 5% in Spain, with 7 to 8% in the most affected and 3% in the less affected areas. So the death to infection rate is unlikely to be the order of magnitude lower aortmannphd suggests, at rates lower than the whole population rates (that is, rates for a population only a small minority of whom are infected) already seen in several places.
Comparing the impact of effective controls and the impact of no controls really needs to take account of what the impact of virus outbreak is if uncontrolled. The impact is certainly economic and certainly substantial. ProfQ has had a reasonable go at working it out including deaths, health impacts, and economic consequences.
Now, where’s a contrary estimate with its basis correspondingly stated? Is there one, apart from handwaving that only additional deaths happen, and that these should be substantially discounted on a modified ‘years of life’ basis?
Because I’m dedicated to the concept of freedom — not actual freedom, just the concept — I demand the creation of Virus Island as a place people can freely cough in each other’s faces as much as they want. They can order supplies by radio that will be deposited on a barge anchored offshore.
The only drawback to this plan is I can’t think of an island I dislike enough.
Andrew Lilley: Sweden isn’t an appropriate example for the baseline case because they had significant restrictions (voluntary, but in a high-compliance soceity that didn’t matter). And they incurred economic costs at least as large as those in Australia.
I’ve already addressed the implications for things like road safety. Short answer: the official aim should be zero deaths, as it is in Sweden, and we should be pushing harder to get there sooner.
https://crookedtimber.org/2020/05/15/whataboutery-and-the-pandemic/
Those are good counterarguments and I appreciate the thoughtful discussion. I agree that we should adopt these measures to aim for zero road deaths. Am a little reticent about the additional costs of lockdowns in Aus after June but you’ve made a consistent and fair case.
Agree the GDP contraction has been 1% more mild in Australia though likely GDP contraction could have been essentially zero in Sweden if they had adopted Australia’s stimulus package (15% of GDP instead of 5%).
Thanks again
Andrew
The additional $300 billion i( or whatevrer) in public debt is not costless in econonic terms.
Overall the baseline looks rather optimistic than pessimistic in every aspect. The US is nowhere near a non response, excess death are quite a bit above official death (moving target, as its state business and now the states that got a preference for low official number play a more important role than before), the numbers are still comeing etc…. The only adjustments in the other direction one could make is health status of the population and maybe a stronger voluntary response that is less undermined by denialists.
“That would have permitted the government to push ahead with tax cuts for high-income earners scheduled for 2024-25 (they may still do this, but it will be a lot harder to justify)”
Come now, really? If the argument doesn’t go along the lines of “now is the worst time to raise [sic!] taxes and reduce people’s spendable income/Labor wants to stick their clammy hands into your pockets*/nobody ever taxed their way into growth/you know better than the government how to spend your own [sic] money”, I’ll eat Barnaby Joyce’s hat.
Whatever the problem, cuts to income tax, and to welfare spending, are always the solution; nothing about coronavirus will have changed this.
(* lol: as if Albanese will oppose the tax cuts)
weel Sunshine,
new arrivals to existence are peters pence cash flow positive.
May, care to decode for me please.
Cross-country panel data:-
https://ourworldindata.org/covid-health-economy#no-sign-of-a-health-economy-trade-off-quite-the-opposite
Anyone wishing to put up an alternative scenario also has to explain why and how Australia would be exceptional.
Note the new, unspecified buzz word. Action on the virus must pass a new, additional test: it must be ‘sustainable’.
This appears to imply that whatever else we do we must stop doing it once a limit on total cost is reached. That limit is unspecified, but invites the powerful to treat ‘impact on me personally’ as the limit. And we must stop acting to limit the effect of the virus, regardless the amount of death or of disability – for that is not subject to a ‘sustainable’ limit whether cumulatively or in rate.
https://coronavirus.jhu.edu/testing/individual-states/florida
https://www.worldometers.info/coronavirus/usa/florida/
Only 8% positive is just conceeding too much.Florida got arround 3% confirmed corona positives with sky high est positivity rates – and that iss with rather drastic measures for a long time. The year is not over either.
https://coronavirus.jhu.edu/testing/individual-states/florida
https://www.worldometers.info/coronavirus/usa/florida/
Only 8% positive is just conceeding too much.Florida got arround 3% confirmed corona positives with sky high est positivity rates – and that iss with rather drastic measures for a long time. The year is not over either.
Further to my point, they’re allegedly “considering” bringing forward the 2022 cuts:
https://7news.com.au/business/finance/australia-income-tax-cuts-could-be-brought-forward-to-2020-c-1288721
(No doubt to help those struggling nurses and police officers earning $180,000 and negatively gearing seventeen properties)