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Grandparent post has been voted into oblivion, so commenting here: > Do you realize how much this quarantine is costing us? Actually, I don't. I've seen a lot

Grandparent post has been voted into oblivion, so commenting here: > Do you realize how much this quarantine is costing us? Actually, I don't. I've seen a lot of people make the argument that lockdowns and other restrictions are "too expensive", but: * I have not seen a single serious attempt to model quite how expensive they will be. * Nor have I seen any attempts to model how expensive alternate approaches would be, e.g. the Swedish model. Quite a few people who propagate it seem to be under the impression that this is implemented with zero economic disruption, but that's definitely not the case. * And to be truly realistic, the models should consider the capabilities of countries to mitigate economic consequences through fiscal or monetary means. Many countries can currently borrow at very low or even negative interest rates, so they may have considerable leverage there.

__blockcipher__ 7y ago
You cannot mitigate economic damage with fiscal or monetary means in any serious way. That statement of yours indicates that you do not understand the difference between money and wealth. Money is an abstraction we use to measure (relative) value. Wealth is the sum total of physical goods/services/resources that we rely on. When you neuter an economy, as we have done in the US, you destroy real wealth. There is no way to counteract that by injecting money. It’s like trying to claim your company is growing because share buybacks made your per-share price go up, yet your market cap in an efficient market has been unchanged. It is no surprise then that someone who holds that view would have trouble seeing the real damage that a shutdown like ours does. We have postponed elective surgeries, leading to furloughing tens of thousands of medical workers across the country because in many areas hospitals are practically empty. We’re halting meat packing plants because some portion of employees have tested positive. We’ve stopped educating our children in person despite covid-19 being less deadly than Influenza in children (this is a fact at this point). We treated a really bad but manageable papercut by chopping off our hand, and in doing so we have widened inequality in _every dimension_. What does a poor school-aged child who does not own a laptop do with remote schooling? What do millions of Americans who live paycheck to paycheck and are now unemployed do? What about those postponing important preventative care that will prevent future deaths from cancer, heart disease, and diabetes? How large of a spike in suicides, opioid overdoses, and psychosis are we going to see? We took a bunch of otherwise healthy people, instilled them with disproportionate, all-consuming fear, and have had people in social isolation, which not only produces its own mortality but will also retard the natural exchange of micro-organisms that our health relies upon. And the biggest joke of all is that eradication is impossible and therefore we didn’t prevent any mortality, we just postponed it, while destroying the quality of life of the 99.4% of the population who never would have died from this thing anyway (there’s debate as to whether the IFR is .3% or 1% but I think .6% is a very conservative number) — In answer to your question about models, you are right that we need more of them, and in rereading your comment I see you were more raising questions than advocating a pro-lockdown stance. In any case I encourage you to check out http://cep.lse.ac.uk/_new/publications/abstract.asp?index=6976 http://cep.lse.ac.uk/_new/publications/abstract.asp?index=69.... I’m on mobile right now otherwise I’d quote from it but they look at it in terms of wellbeing-years
- AnthonyMouse 7y ago
  > You cannot mitigate economic damage with fiscal or monetary means in any serious way. You kind of can. In a situation like this, you have a lot of people who can't work because they're at home (or have no customers because their customers are at home), which causes two types of economic damage. One, the thing they were making is not being made. Two, they're not getting paid, so they're not buying what they would have bought with the money, and then that isn't getting made and so on down the line. The second problem is actually bigger (because of "and so on down the line") but can be addressed entirely via fiscal means. Give people money to replace what they're not making. And it even helps some with the first by increasing general demand. The things that are still open (e.g. because they're work from home) will then see increased business, have to hire more people to fill the demand and provide jobs for the people who can't do their normal jobs so they're still being productive. Doing that is not going to eliminate the entire cost, but it is going to make it a lot smaller. > It’s like trying to claim your company is growing because share buybacks made your per-share price go up, yet your market cap in an efficient market has been unchanged. Buybacks actually reduce the market cap because there are fewer outstanding shares and the company has fewer total assets (in the amount of the cash used for the buyback which the company no longer has because it is now in the hands of the shareholders who sold their shares). And doing that does tend to cause the overall economy to grow because it moves cash from a company that apparently had no need for it to investors who are incentivized to find somewhere else to put it to productive use. This isn't to say that your overall conclusion is necessarily wrong. Even 10% of the cost of shutting down the whole world is large. But if you want to compare the numbers they should be the right numbers.
  - mariodiana 7y ago
    > Give people money to replace what they're not making. Count yourself among those who do not understand the difference between money and wealth. What they're "not making" isn't money; what they're not making are goods or services. That's the point you're attempting to respond to, and you've missed the point.
    - AnthonyMouse 7y ago
refurb 7y ago
I have not seen a single serious attempt to model quite how expensive they will be How about the fed's estimate of a ~5% hit to GDP in Q2. The economic ramifications of the shelter-in-place are going to be massive.
- runako 7y ago
  For those who don't have the numbers handy, US GDP is about $20T. If it were even spread out through the year (it is not), a 5% hit in Q2 would be $250 billion in that quarter.
- fspeech 7y ago
  You blame the shelter-in-place order which actually improves over an uncoordinated economic shutdown that the epidemic is fully capable of generating on its own. You can't separate the effect of the shelter-in-place order from that of the viral epidemic. With a raging outbreak, even without a shelter-in-place order people will still not go to most businesses. You could have the same economic downturn without the benefit of a shelter-in-place order where people's actions are more coordinated. And this is without accounting for the cost of a possible social breakdown if enough people panic about not having fair access to healthcare when the hospitals are overwhelmed. If we could coordinate a perfect shelter-in-place the outbreak would have been gone by now. If people don't cooperate with each other we will have a much prolonged outbreak.
  - thepope 7y ago
    hmm, I'm OP and you might have a good point there. I will think about that. I'm not saying you are right ...lol btw i dont know why literally every single fucking thing i say on the internet no matter what always gets downvoted even when im talking about a neutral subject and being positive but where was i? oh yeah, I'm not saying your right but at first thought I think you are making a good point.
    - afiori 7y ago
      regarding the downvotes I can share an opinion based on similar experiences: in my case it often was about not being thoughtful in choosing what to say. Or in another perspective think about whether your comment is what you feel like saying or whether it is something that contributes to the discussion.

__blockcipher__ 7y ago

You cannot mitigate economic damage with fiscal or monetary means in any serious way. That statement of yours indicates that you do not understand the difference between money and wealth. Money is an abstraction we use to measure (relative) value. Wealth is the sum total of physical goods/services/resources that we rely on. When you neuter an economy, as we have done in the US, you destroy real wealth. There is no way to counteract that by injecting money. It’s like trying to claim your company is growing because share buybacks made your per-share price go up, yet your market cap in an efficient market has been unchanged. It is no surprise then that someone who holds that view would have trouble seeing the real damage that a shutdown like ours does. We have postponed elective surgeries, leading to furloughing tens of thousands of medical workers across the country because in many areas hospitals are practically empty. We’re halting meat packing plants because some portion of employees have tested positive. We’ve stopped educating our children in person despite covid-19 being less deadly than Influenza in children (this is a fact at this point). We treated a really bad but manageable papercut by chopping off our hand, and in doing so we have widened inequality in _every dimension_. What does a poor school-aged child who does not own a laptop do with remote schooling? What do millions of Americans who live paycheck to paycheck and are now unemployed do? What about those postponing important preventative care that will prevent future deaths from cancer, heart disease, and diabetes? How large of a spike in suicides, opioid overdoses, and psychosis are we going to see? We took a bunch of otherwise healthy people, instilled them with disproportionate, all-consuming fear, and have had people in social isolation, which not only produces its own mortality but will also retard the natural exchange of micro-organisms that our health relies upon. And the biggest joke of all is that eradication is impossible and therefore we didn’t prevent any mortality, we just postponed it, while destroying the quality of life of the 99.4% of the population who never would have died from this thing anyway (there’s debate as to whether the IFR is .3% or 1% but I think .6% is a very conservative number) — In answer to your question about models, you are right that we need more of them, and in rereading your comment I see you were more raising questions than advocating a pro-lockdown stance. In any case I encourage you to check out http://cep.lse.ac.uk/_new/publications/abstract.asp?index=6976 http://cep.lse.ac.uk/_new/publications/abstract.asp?index=69.... I’m on mobile right now otherwise I’d quote from it but they look at it in terms of wellbeing-years

AnthonyMouse 7y ago
> You cannot mitigate economic damage with fiscal or monetary means in any serious way. You kind of can. In a situation like this, you have a lot of people who can't work because they're at home (or have no customers because their customers are at home), which causes two types of economic damage. One, the thing they were making is not being made. Two, they're not getting paid, so they're not buying what they would have bought with the money, and then that isn't getting made and so on down the line. The second problem is actually bigger (because of "and so on down the line") but can be addressed entirely via fiscal means. Give people money to replace what they're not making. And it even helps some with the first by increasing general demand. The things that are still open (e.g. because they're work from home) will then see increased business, have to hire more people to fill the demand and provide jobs for the people who can't do their normal jobs so they're still being productive. Doing that is not going to eliminate the entire cost, but it is going to make it a lot smaller. > It’s like trying to claim your company is growing because share buybacks made your per-share price go up, yet your market cap in an efficient market has been unchanged. Buybacks actually reduce the market cap because there are fewer outstanding shares and the company has fewer total assets (in the amount of the cash used for the buyback which the company no longer has because it is now in the hands of the shareholders who sold their shares). And doing that does tend to cause the overall economy to grow because it moves cash from a company that apparently had no need for it to investors who are incentivized to find somewhere else to put it to productive use. This isn't to say that your overall conclusion is necessarily wrong. Even 10% of the cost of shutting down the whole world is large. But if you want to compare the numbers they should be the right numbers.
- mariodiana 7y ago
  > Give people money to replace what they're not making. Count yourself among those who do not understand the difference between money and wealth. What they're "not making" isn't money; what they're not making are goods or services. That's the point you're attempting to respond to, and you've missed the point.
  - AnthonyMouse 7y ago

refurb 7y ago

I have not seen a single serious attempt to model quite how expensive they will be How about the fed's estimate of a ~5% hit to GDP in Q2. The economic ramifications of the shelter-in-place are going to be massive.

runako 7y ago
For those who don't have the numbers handy, US GDP is about $20T. If it were even spread out through the year (it is not), a 5% hit in Q2 would be $250 billion in that quarter.
fspeech 7y ago
You blame the shelter-in-place order which actually improves over an uncoordinated economic shutdown that the epidemic is fully capable of generating on its own. You can't separate the effect of the shelter-in-place order from that of the viral epidemic. With a raging outbreak, even without a shelter-in-place order people will still not go to most businesses. You could have the same economic downturn without the benefit of a shelter-in-place order where people's actions are more coordinated. And this is without accounting for the cost of a possible social breakdown if enough people panic about not having fair access to healthcare when the hospitals are overwhelmed. If we could coordinate a perfect shelter-in-place the outbreak would have been gone by now. If people don't cooperate with each other we will have a much prolonged outbreak.
- thepope 7y ago
  hmm, I'm OP and you might have a good point there. I will think about that. I'm not saying you are right ...lol btw i dont know why literally every single fucking thing i say on the internet no matter what always gets downvoted even when im talking about a neutral subject and being positive but where was i? oh yeah, I'm not saying your right but at first thought I think you are making a good point.
  - afiori 7y ago
    regarding the downvotes I can share an opinion based on similar experiences: in my case it often was about not being thoughtful in choosing what to say. Or in another perspective think about whether your comment is what you feel like saying or whether it is something that contributes to the discussion.