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My estimate is the death toll from Covid is saving trillions in future benefit obligations for the US overall. From a GAAP perspective, the epidemic might come
by iav 6y ago
My estimate is the death toll from Covid is saving trillions in future benefit obligations for the US overall. From a GAAP perspective, the epidemic might come out a wash. This contrasts with the 1918 pandemic, which mainly killed the young and productive.
- bildung 6y agoThe US isn't a small business, and as such debt works different. If the US now borrows $1 trillion, it currently pays essentially 0% interest. Assuming 2% inflation that means the whole debt has a value of just 370 billion in 50 years, without paying back a single cent. But this is only the beginning: If the US gets that $1 trillion debt, that money didn't just vanish. It gets spent in the economy, people consume things, stay employed etc., infrastructure gets developed and so on. ROI is usually there after only a few years: "Research [...] showed that one dollar of public money spent during the 2007-09 crisis could generate 2.5 dollars of output in five year’s time." https://theconversation.com/how-much-bang-for-a-buck-working-out-the-returns-on-government-spending-34393 https://theconversation.com/how-much-bang-for-a-buck-working... So for every $100 the country borrows in the current climate, it only has to pay back a $37 in 50 years while getting returns of over $200 in 10 years.