Coronavirus

How Badly Could the Novel Coronavirus Epidemic Whack the U.S. Economy?

Looking at better and worse projections.

|

Investors evidently, for the moment, think that the novel coronavirus outbreak is going to hurt the global economy. The S&P 500 stock index is down about 19 percent from its highs a month ago. Only time will tell if those fears are justified, but a couple of economists at the Australian National University use econometric modeling to trace out scenarios to help the public and policymakers better understand how the COVID-19 epidemic could play out over the coming year. Keep firmly in mind that these are scenarios, not predictions.

In these scenarios, the Australian researchers seek to take into account the ferocity of the disease, and how consumers, producers, and governments will react. They try to quantify macroeconomic variables such as the direct costs of the disease, the costs of global supply chain disruption, the effects on labor supply, and how consumer spending will fall as a result of people's efforts to avoid exposure to infection in public spaces.

Let's set aside the three scenarios that chiefly focus on the disease's effect on China, and look specifically at the broad effects on the U.S. economy in their better- and worse-case scenarios. In their better-case scenario (scenario four) the researchers calculate that the overall mortality rate in the U.S. would be 0.07 percent, resulting in the deaths of 236,000 Americans in the first year.

It is important to note that the mortality rate is calculated by dividing the entire population by the number of disease deaths. The case-fatality rate is calculated by dividing the number of infected people by the number of people who died of the disease. To get at what the case-fatality rate implied by these scenarios might be, let's assume the coronavirus infects people at about the same rate as a 1918 Spanish flu epidemic U.S. infection rate of 28 percent. Today that would mean that 90 million Americans would contract the virus, implying a case-fatality rate of just under 0.3 percent. The seasonal flu case-fatality rate is around 0.1 percent.

In their worse-case U.S. scenario, the Australian researchers calculate that the disease would kill about 1,060,000 Americans in the first year, yielding an overall mortality rate of 0.3 percent. Assuming the Spanish flu attack rate, that implies a case-fatality rate of 1.2 percent. That is just half of the U.S. 2.4 percent case-fatality rate for the 1918 Spanish flu epidemic.

In the better-case scenario, the COVID-19 epidemic would reduce U.S. GDP by 2 percent or about $420 billion. In the worse-case scenario, GDP would drop by more than 8 percent, that is, $1.8 trillion dollars. For comparison, real U.S. GDP fell by 4.3 percent during the Great Recession a decade ago, reducing U.S. GDP by about $650 billion.

In the Australian researchers' scenarios, the coronavirus outbreak also whacks the stock markets. "Equity markets drop sharply both because of the rise in risk but also because of the expected economic slowdown and the fall in expected profits," explain the authors. As it happens, today is the eleven-year anniversary of the S&P 500's Great Recession bottom closing price of 676, down from its 1,565 high closing price on October 9, 2007. That was a 56 percent decline.

The researchers' scenarios project a fast, V-shaped economic recovery as the epidemic wanes in the next year.

The researchers devised these scenarios as a way to argue that possible big losses stemming from pandemics justify greater investments in public health measures. But how plausible are the scenarios with respect to the way the novel coronavirus epidemic is currently playing out?

Consider that in their best-case scenario for China, the researchers calculated that the epidemic would kill 280,000 Chinese people in the next year and, in the worst case, 12.6 million Chinese people would succumb to the disease. Although the coronavirus is continuing its spread across the globe, the fact that China has reported 3,120 deaths and the rate of infection is dropping suggests that even the Australians' best-case scenario may prove to be too pessimistic. Let's hope so.

NEXT: California Wants To Carve Out Religious Exemptions to Its Insane Housing Laws

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I think it’s pretty clear that the effect on the economy and the effect of the disease can be two different things.

    For instance, many medical professionals have been critical of various countries and their “reactive” response to the disease.

    A proactive response can often mean damage to an economy when the real threat of the disease hasn’t even been fully worked out. Closing venues, schools, factories, office spaces and limiting contact and overseas travel will definitely have an effect on the economy. I believe that no matter if this disease turns out to be fairly mild, it’s going to cause the economy to falter– at least in the short term. Even if we just take the Chinese experience by itself, there’s no way you implement the measure the Chinese government did without punching your economy in the gut.

    1. What’s going on in Italy is criminal. As if the virus hasn’t already spread everywhere. Blowing apart small businesses and losing jobs, reducing production, that will starve a lot more people than this will kill with secondary infections.

    2. I believe that no matter if this disease turns out to be fairly mild, it’s going to cause the economy to falter– at least in the short term.

      Define falter. Because this probably will be a blip 20 years from now.

        1. So….define what you mean by falter. I am trying to gauge the severity of falter as you use it.

  2. As badly as the media will permit. And, since the media understand no boundaries, no reason, and no restraint, this entirely manufactured hysteria has the potential to severely disrupt global economic prospects for the next six months to a year. One lesson that I hope we have learned is that having your entire production arsenal in China is a bad fucking idea.

    1. Yeah man, Trump and Pence are virologists and experts of expertology! Believe in THEM, not the CDC doctors of doctorology! Do NOT be taken in by the “fake news”, or you might hurt the stock markets!

      https://www.politico.com/news/2020/03/09/donald-trump-obama-fake-news-tweets-124320

      While market sinks, Trump tweets on Obama, ‘fake news’ and the Dem primary
      Trump fired off more than two dozen tweets and retweets but was silent on coronavirus until a Wall Street nosedive halted trading.

      End headlines import.

      Hillary-style, “Vast Left-Wing Conspiracy” will drop from His Sweet Dear-Leader Lips any time now! If you believe that the virus will hurt the stock market, you are conspiring against capitalist-style prosperity! If you believe that we must all die someday (AND you are willing to say as much), then you are PRO-DEATH, you evil bastards!!!

      1. Kill yourself with your mom’s spatula.

        1. Gargled-Trump-Balls Gooozzy-Gooo-Gooo-Chotchy-Coo-Coo-Baa-Baa, drinking Shitsy Shitler’s Kool-Aid in a spiraling vortex of darkness, cannot or will not see the Light… It’s a VERY sad song! Kinda like this…

          He’s a real Kool-Aid Man,
          Sitting in his Kool-Aid Land,
          Playing with his Kool-Aid Gland,
          Has no thoughts that help the people,
          He wants to turn them all to sheeple!
          On the sheeple, his Master would feast,
          Master? A disaster! Just the nastiest Beast!
          Kool-Aid man, please listen,
          You don’t know, what you’re missin’,
          Kool-Aid man, better thoughts are at hand,
          The Beast, to LEAVE, you must COMMAND!

          A helpful book is to be found here: M. Scott Peck, Glimpses of the Devil
          https://www.amazon.com/exec/obidos/ASIN/1439167265/reasonmagazinea-20/

          1. Choking on your dad’s incontinence pads is one way to get it done, retard.

            1. Swallow a rusty nail and then make sure to push real hard the next morning, cocksucker.

            2. Expel the evil out of your heart, mind, and soul! After you do that, Trump is guaranteed to be less likely to appoint you to His Cabinet, but YOU will be left BETTER OFF!!! MUCH better off!

              1. Go sit on a homeless dick.

                1. When Trump went down to the CDC to fill them in on what he knew about the Coronavirus, he actually said: “I like this stuff. I really get it. People are surprised that I understand it. Every one of these doctors said, “How do you know so much about this?” Maybe I have a natural ability. Maybe I should have done that instead of running for President.

                  But you know what? What they’ve done is very incredible. I understand that whole world. I love that world. I really do. I love that world. And they should be given tremendous credit. And the whole world is relying on us.”

                  See, if Trump hadn’t decided to run for President, he could very well be head of the CDC instead.

                  But then he also said this: “But over the last long period of time, when people have the flu, you have an average of 36,000 people dying. I’ve never heard those numbers. I would — I would’ve been shocked. I would’ve said, “Does anybody die from the flu?” I didn’t know people died from the flu — 36,000 people died. Twenty-seven thousand to seventy-seven thousand, that’s your flu.”

                  So maybe he wouldn’t have been head of the CDC. But he could be President when he said this: “Well, we’re considering different things. But we’re also considering the fact that last year we had approximately 36,000 deaths due to what’s called the flu. And I was — when I first heard this four, five, six weeks ago — when I was hearing the amount of people that died with flu, I was shocked to hear it. Anywhere from 27,000 to 70,000 or 77,000. And I guess they said, in 1990, that was in particular very bad; it was higher than that.

                  As of the time I left the plane with you, we had 240 cases. That’s at least what was on a very fine network known as Fox News. And you love it. But that’s what I happened to be watching.

                  And how was the show last night? Did it get good ratings, by the way?” [Referring to his interview with Brett Baier.]

                  [Reporter answers] I — I don’t, sir.

                  ” Oh, really? I heard it broke all ratings records, but maybe that’s wrong. That’s what they told me. I don’t know. I can’t imagine that.”

                  I’ll bet the head of the CDC never thought about interjecting an aside about how yuge his TV ratings were in the middle of a press conference about the Coronavirus. And I’m sure they’d never say this: “But anybody that needs a test can have a test. They’re all set. They have them out there.

                  In addition to that, they’re making millions of more as we speak. But as of right now and yesterday, anybody that needs a test — that’s the important thing — and the tests are all perfect, like the letter was perfect. The transcription was perfect, right? This was not as perfect as that, but pretty good.” Perfect test, perfect letter, perfect transcription, perfect President.

                  1. You should try swallowing your meds with a side of jizz, you twat.

                    1. Gasbag Boozer-Loser,
                      Please listen!
                      You don’t know,
                      What you’re missing!
                      Donald’s ass, don’t be kissin’!
                      Trump won’t love you,
                      He’ll push and shove you!
                      He’ll take your vote,
                      Then call you a goat!
                      He’ll tax your money,
                      Then steal your Honey!
                      Your pussy, He will grab,
                      Your back, He will stab!
                      His-victims-routines, He’s iterating,
                      Shit about YOU, He’ll be Twitterating!

                2. Each response from geraje earned the obligatory smile, but this last one sent me over the edge lmao.

                3. that is pretty harsh one to be honest

        2. If there is a God……

      2. Wow, is Politico ever a bunch of lying hacks. Literally a Democratic PAC masquerading as political reporters at this point.
        They may as well just stick a big blue “D” on their masthead.

        1. Tell, me, please, Mamma… In order for you to believe it…

          ‘A) Rash Limberger has to say that it is true, AND ‘B) Ann Coulter has to say that it is true, AND ‘C) 4Chan say that it is true, AND ‘D) Breitbart say that it is true, AND (XYZ, add more as needed)… Or… Can 2 or 3 of these sources be enough? Or do they ALL have to agree, and if so, how LONG is this list, anyway?!?! (Does it also include your fevered, self-centered mind?)

          Inquiring minds want to KNOW, dammit!

  3. You really believe the Chinese government’s 3,100 deaths figure Ron Bailey? I thought most people agreed you can’t trust any statistic published by the PRC because they have proven willing to publish false statistics to try to control public opinion.

    1. I don’t believe them either. Frankly, the Chinese have not been transparent at all. Which makes me wonder just how much we can trust them in our trade agreement.

  4. People are insane. There is no way that the “Best Case Scenario” could be worse on the United States than the flu every year. Mind you, I’ll accept the possibility that the Coronavirus will be worse than the flu. But I also think there is a decent possibility that it is about the same as the flu.

    Indeed, the Flu and Coronavirus target the same elderly adults- especially those with chronic respiratory conditions. They are killing one anothers’ target population.

    Simply put, the best case scenario should be somewhere around 10 – 55,000, which is roughly double what we lose to Flu each year without massive impact to our national economy.

    1. “People are insane.”

      Good up-front summary! The over-reaction is what will slam us badly; not the phenomenon itself. In the wake of Three Mile Island, Chernobyl, the Japanese reactors, etc., you’d think we’d learn. Or the “Satanic ritual abuse” stories of the 1990s, or witches in the Dark Ages. Alar-contaminated apples. You name it… LET’S ALL PANIC! But the show must go on!

      Trump-style “don’t panic” commands, and sweeping it all under the rug, do NOT help, though!

      1. Drink a cup of boiling piss, you pederest.

        1. Did any of you evil assholes ever ask a parent (of any age) THIS question:
          Would you rather have your child sexually molested, or egged on into suicide? If you get an honest answer, they will answer, “suicide is the worst option of all”!
          Hey Geraje Guzba… YOU EVIL SATAN-PENIS-SUCKING DARK-SOULED ASSHOLE!!! ARE YOU PROUD OF YOUR PRO-SUICIDE SATAN BUTT-SUCKING WAYS?!?!?
          How many kids you gotten to kill themselves lately, asshole? ANY of them made you happy yet? Or are you looking forward to raping their dead corpses, you sick bastard you?

          I see you’re pimping for the Evil One yet AGAIN! So… HOW MANY people, so far, have you persuaded to commit suicide? Have ANY of these suicides brought you ANY long-lasting happiness, yet? If not, then WHY don’t you give UP your evil ways?
          I really don’t care one way or the other, if you or anyone else believes that the Evil One is “real”, or metaphorical. “Machs nix” to me. What I WOULD like for you, and others, to understand, is that by obeying the “spirit of the Evil One” (whether “real”, or not), you make the Evil One real… Just like obeying (or praying to) the Spirit of Peace and Love, makes it real! Whether it is “real”, or not! Because it is VERY difficult (actually impossible) for me to go off and stab my neighbor in the back, needlessly, immediately after having SINCERELY prayed for peace!
          On the flip side… By lusting for others (who think “wrong” thoughts, in Your Exalted View) to commit suicide, your spread hatred, destruction, and self-destruction. You’re PROUD of that?
          Next time you’re “channeling” the Evil One in Your Self-Esteemed Mind, and dreaming up new-and-improved ways to encourage people to kill themselves, I would like for you to ask the Evil One the same simple question that I just asked you: Have ANY of the suicides that you have solicited and enabled, brought you ANY long-lasting happiness? We already KNOW that the answer is NO! An excellent working definition of evil is “the unquenchable thirst”! So why not give UP on your FAR-worse-than-useless, EVIL quests?

          Evil Geraje Guzba! Is THAT how you want to be remembered, after the worms start crawling through your rotting flesh? Or your cremated ashes are thrown in the dump?

          1. Fuck a corpse, slut.

            1. I trust in YOU of ALL people, to show me THAT particular death-worshipping way! But I am NOT following, oh ye slave to the Evil One!

              1. Grill your toenails like onions and serve them on a dish to the retarded kids you have locked in your basement.

      2. So, ‘Let’s all panic!!!!!’ is bad–but ‘Don’t panic!!!’ is bad too–if Trump says it?

        It is simply amazing how you continuously speak out of your asshole like that without ever noticing that you’re covered in the shit you spew.

    2. Why do you doubt that the effect would be worse than the flu? It has a higher transmission rate and a higher fatality rate. Everything we know about this bug tells us it is indeed worse than the flu.

      1. Except you know… the actual country and global numbers for those killed. Just hit 20k for flu. Keep cowering though. 2 years ago flu killed almost 80k. Vast majority of those catching covid 19 have mild or no symptoms. Estimated at 80%. Still no deaths for those under 14 globally. Best majority killed over 60. But no, keep cowering.

      2. It has a zero fatality rate.

        Zero.

        The fatalities, every one, is from people dying from COMPLICATIONS of the coronavirus.

        It is the exact same situation as with the common cold.

  5. How Badly Could the Novel Coronavirus Epidemic Whack the U.S. Economy?

    Negligible. Not even Amazon carries the novel “Coronavirus Epidemic”.

    1. I’ll wait for the movie.

      1. “Just keep reminding yourself: ‘It’s only a movie!'”

  6. Right now the answer is who knows because the data is sketchy. The market is assuming the worst and if it keeps doing that then the market could actually affect underlying businesses who need to refinance, or reduce consumer spending for a period based on the reverse wealth effect. The media have behaved deplorably as have some of the ‘health’ related institutions.

    If deaths in the US don’t start to massively increase then I think the market comes to its senses are realizes this is relatively minor in terms of real world impact. If the bad assumptions are correct, deaths and serious hospitalizations will (1) go “exponential” and (2) include a lot of people under 60. That should not take much longer to show up – this virus has been here for months.

    Cruises will be hurt for a long time, regardless. But hotels and travel and events will recover pretty quickly. The rest of the economy is barely effected. Perhaps purchases of software got put off a quarter, etc. Weak Q2 and maybe half of 3, the future ends up exactly the same but with looser monetary policy because of the virus scare.

    Prior to this, the US economy was really starting to pick up. Housing is doing well for the first time in a long time. Leading indicators made it seem like last year was actually Trump’s version of a recession. Really bad timing – a lot of people are just going back into the workforce, it would be terrible to see the rug pulled out.

    But if say Trump were to lose and this doesn’t go away before the election, yikes. Imagine being in a panic-driven recession with a guy with a 65 IQ in charge (Biden) who, when he had a 102 IQ, was wrong about everything?

    1. Market is not assuming the worst, yet. If the worst case scenario in the article above is the worst, then equities would fall another 50% or so from today’s close.

      1. Lol. Look at the financial impact of sars or the swine flu. It will be forgotten by summer.

      2. DOL…Would you agree the financial markets are over-reacting due to uncertainty?

    2. Alternatively, there are those who say the stock market is over-valued and this isn’t simply a reasoned reaction to how the Coronavirus thing is going to affect the economy but just the straw that broke the camel’s back on jittery investors already nervous about where things were headed. A herd of cattle don’t each individually consider whether or not they should join the stampede, once you hit a critical mass there’s a stampede whether there’s a reason for it or not.

      1. This!
        Plus we always fall in election years and usually go higher than before starting in January.

      2. Possibly. The markets, including real estate, are fast approaching over bought. Likely, there will be downturn or even crash somewhere around 2022 – 2023. Could be set off earlier by signiificant events.

  7. One thing that I will never get over about our society is how much we love to look at projections and speculate about potential outcomes versus how terrible we are at actually projecting and speculating about potential outcomes.

    1. Things usually turn out better than expected.

      1. That is a good and positive thought! Thank you!

        The exceptions are often quite ugly, though, from the personal perspective of the victims. Think of Jews killed under “Mustache Man Bad”. And think of free trade killed, and illegal sub-humans thwarted as scapegoats (who would merely like to come here to earn an honest living, doing dirty work left undone by the native-born), under “Orange Man Bad”, though.

        1. I think ‘Don’t look at me’ has this right. This will turn out better than we expect right now.

  8. Meanwhile the assclowns and panicky girls at MSNBC think calling it the Wuhan Virus is racist. That is the left’s response. Panic and sling shit on Twitter.

    1. MSNBC also predicted a global 20% death rate. They are awful.

      1. That’s insane. Do you have a link or reference to this? Even for them that sounds ridiculous.

        1. FYI, JesseSDPAZ has a history of lying.

          JesseAZ does NOT believe that LIES are bad in ANY way! Only ACTIONS matter, ethically or morally! See https://reason.com/2020/01/01/trumps-inartful-dodges/#comment-8068480
          “Words are words dumbfuck. Actions are where morals and ethics lie.”, says JesseAZ. When confronted with offers of hush money, illegal commands (from a commanding military officer), offers of murder for hire, libel, slander, lies in court, yelling “fire” in a crowded theater, inciting riots, fighting words, forged signatures, threatening to kill elected officials, false representations concerning products or services for sale… these are all “merely” cases of “using words”. Just like the Evil One (AKA “Father of Lies”), Jesse says lies are all A-OK and utterly harmless! So do NOT believe ANYTHING that you hear from JesseAZ!

          Also according to the same source, JesseAZ is TOTALLY on board with dictatorship (presumably so long as it is an “R” dictator that we are talking of).
          With reference to Trump, JesseAZ says…
          “He is not constitutionally bound on any actions he performed.”

          I say again, this is important…
          “He is not constitutionally bound on any actions he performed.”
          We need a BRILLIANTLY persuasive new movie from JesseAZ to “Wake Up, America!”, to flesh out the concept that “The Triumph of The Will of The Trump, Trumps All”! Including the USA Constitution. In fact, USA military personnel should start swearing allegiance to Trump, NOT to some stupid, moldering old piece of paper!
          Previous Powerful People have blazed a path for us to follow here, slackers!!!

          1. Fuck dude you’re worthless. Seriously. No one wants to read your clown shit.

            1. Hi Clown-Shit-Eater and Liar-Believer,

              I really, REALLY feel for ya, bro or bro-ess!

              To make up for my CLEARLY egregious offenses against you, I am willing to sing you a long-dong-song; a sing-along song:

              Cootchy-cootchy-cooo, Buckaroo!
              Don’t be sad and blue, Buckaroo!
              Sweet Little Thang, say “Goo-goo-gah-hah”;
              CAN ye, PLEASE, for Mama-Dadda-Ba-Ba?
              Put on a Happy-Baby smile, for a LITTLE while!
              Fend OFF my tears-of-the-Great-Crocodile!

              (If’n it ain’t enough, if ye will give me yer address… Did yer Mamma teach you that item yet? … Then I will PERSONALLY drive over to Your Happy House, and deliver a consolation warmed-up ba-ba to ya!)

              Now, I have NO “deep pockets” and I hate to bring this up, for fear of too-deeply “tapping” the pockets of Reason.com…

              But… IF by any chance, my generous offer is NOT enough to assuage your DEEPLY offended feelings… And maybe you are seriously contemplating some SERIOUSLY destructive vengeance, such as Holding Your Breath till such time as the Very World Itself implodes… Then I Truly Beseech Ye, don’t DO that! Not quite yet! First, send an email to Reasdon.com… I have written a draft for YE:

              To: SQRLSY_One_Has_Hurt_My_Deepest_Feelings@Reason.com

              Reason! SQRLSY One has HURT MEEE, Deeply! SQRLSY One has offered to sing ME some stupid, hurtful sing-along, ding-a-dong song, and to bring ME a warmed-up ba-ba, but it is NOT enough to make even the TINIEST dent in MY DEEPLY Hurt Feelings!

              Accordingly (with the writing-assistance of MY attorney), please be advised that the hurtful statements of SQRLSY One has caused ME to require, for MY “medically required” recovery:

              ’20 hours of self-esteem therapy

              ’32 hours of crystal-healing therapy

              ’34 hours of aromatherapy

              ’15 hours of therapy-therapy

              ’17 hours of Government-Almighty-Loves-MEEE-therapy

              ‘As-yet-to-be-determined XYZ hours of Repairing MY Hurt Baby Feelings Therapy!

              That comes up to around-about $137,538.27! So PAY UP, or else!

              Yours Truly,
              A Truly and Deeply Hurt, Long-Suffering VICTIM!!!

          2. Your examples are of actions or incitements to action, not of words alone. Threats, fraud, incitement are not words alone rather threaten some tangible action. Idle boasts, lies don’t concern me unless they threaten adverse action.

  9. We must keep in mind that the economy was already abysmal before the #TrumpVirus was unleashed upon the world. Drumpf’s high-tariff / low-immigration policies created conditions so desperate that, as AOC explained, everybody needed 2 or 3 jobs to survive.

    Now with this deadly global plague, the #DrumpfRecession has officially become the #DrumpfDepression.

    1. Excellent.

      1. Pedestrian. Although sometimes OBL is funny.

    2. What’s Drumpf? Never heard of anything called Drumpf.

    3. You’ve got Trump virus.

  10. Stories will come out about how the media hyped this hysteria. And when the voters find out what the media has done to their 401ks, they will be VERY upset….again.

    1. I’m already ultra-passed at what the media has done to my portfolio.

      We won a large settlement last year, and the taxes are due now. So now we have to sell after the market has dropped because of manufactured media hysteria.

      Fuck the media and their fake news.

      1. Why didn’t you set the taxes aside in a less volatile investment, since you knew they would be due. When you play with fire don’t complain about getting burned.

      2. This is a bad and irresponsible use of your money.

        Media is gonna media. They are shitty crooks who try to sensationalize everything to make their narrative work. This will never change.

        But 10+ years into a bull, with stocks clearly overvalued, and you kept an amount you knew you would need to sell in a risky asset. The only thing that should be kept there in that scenario is something you plan and can hold far into the future past this dip when the market goes back up. You waited too long and got burned.

        Furthermore, they had a long wind-up period of pre-hysteria before the sell off started when the DJIA was still sitting at 29k. You even had a chance to preemptively sell! I was hearing coronavirus junk from the media for like 2 weeks before the sell off happened.

        In anticipation of what happened, I preemptively made some moves and assets available, and bought a shit load when the market bottomed out in the 24’s. Ill probably buy another shitload the next time it dips down there. So the media worked well for me. Gotta play the game right my man.

  11. Let’s assume the worst-case scenario of 1.06 million American deaths for a moment. That’s a little under 0.3 percent of the United States population, the overwhelming majority of whom would likely be patients over the age of 65. (Upwards of 70 to 85 percent of flu-related deaths are in this age category.) What would be the most likely reproductive response from the younger generation? Would they simply shrug, move on with their lives, and allow birth rates to continue their steady decline? Or might we see something if a Baby Boomlet over the next few years, on the order of what we witnessed in the mid-Aughts?

    The possible effects on employment prospects for younger workers are interesting to contemplate, too. For the last decade and a half or so, Millennials have found it difficult to rise in the ranks, partly because so many Boomers and Gen Xers have been remained in the workforce well into their ’70s and even their ’80s. With a spike of seniors being laid six feet under, we might see some real career advancement among the ranks of Millennials. With the rise in earning potential, we could conceivably see a concurrent jump in the marriage and fertility rates, which would likely drive up prices of single family dwellings, which have started to stagnate in much of the country over the past few years. This might mitigate losses in commodities, equities, and other economic sectors.

    With improved opportunities for professional jobs accruing to Millennials, we might see a wave of teenagers rolling into entry-level positions in the service industry, too many of each which are currently held by stymied Millennials and old timers who can’t afford to retire.

    What I’m trying to say is that the worst-case scenario, although it would be painful in the short term, probably doesn’t represent anything resembling a generational catastrophe, and it could in fact serve as a catalyst for organic rejuvenation of our social and economic structure.

    Of course, the more likely prospect, in my opinion, is that the turmoil arising from this pandemic poses little more than an inconvenient blip on the graph that will be largely forgotten by this time next year.

    1. i agree. i see a pandemic that mostly only ravages the senior citizen and infirm populations as a tail wind in the medium term.

      1. About the medium term, I couldn’t agree more. I meant to make a comment to that effect in my original comment, but I ran out of time.

    2. Long-term I’m optimistic for the same morbid reasons you are. Esp if it becomes endemic and returns annually at a lower attack and fatality rate. The lion culling the weaker zebras that we can’t bring ourselves to do.

      OTOH – epidemics are less about the dead than the living. And the US is going into it with no social cohesion at all. Idk historical examples but I’ll bet there are some where the epidemic has left a failed society in its wake. That then proceeds to rip itself to shreds over the long-term in far deadlier effect than the epidemic.

      1. > The lion culling the weaker zebras that we can’t bring ourselves to do.

        i think we need to cull Libertarians first

        1. Cull you.

      2. Would I be a conspiracy theorist if I speculated that this virus may actually be a bioweapon for SocSec reform?

      3. “Boomers and Gen Xers have been remained in the workforce well into their ’70s and even their ’80s. With a spike of seniors being laid six feet under, we might see some real career advancement among the ranks of…”

        The Babies still working in their 70s and 80s are the ones likely healthy enough not to die. Sorry, dude, back to the shit job or unemployment line for you.

    3. Hey now! Literally zero Gen-Xers have “remained in the work force well into their 70s or even 80s”!

      Let’s not get ahead of ourselves. Haha.

      1. Yeah. Gen X is in the 40s and 50s.

        1. Yeah, yeah, yeah, I should have left Generation X out of my analysis.

    4. So, Thanos should have killed the oldest half of the population…

  12. In these scenarios, the Australian researchers seek to take into account the ferocity of the disease, and how consumers, producers, and governments will react. They try to quantify macroeconomic variables such as the direct costs of the disease, the costs of global supply chain disruption, the effects on labor supply, and how consumer spending will fall as a result of people’s efforts to avoid exposure to infection in public spaces.

    Have 97% of Australian economic researchers reached a consensus on this yet?

    1. Need james cook to use a biased search metric of reading only abstracts where he rejects 90% of them to tell.

  13. Trump is taking flak about calming fears from the same ideological fellows who praise FDR’s “Nothing to Fear but Fear itself.” Roosevelt’s long Great Depression probably killed more folks than coronavirus will (or so men of goodwill hope).

    1. It’s a great piece of reverse psychology.

      If President Trump said the virus was dangerous to the country and we were all in danger, the anti-Trump people would respond defiantly by going out in public and breathing on strangers.

      But since he’s downplayed the dangers, the anti-Trumpers will respond by assuming it *is* dangerous and by taking precautions against the virus.

      So, really, Trump is helping protect us.

  14. Right, its CV that’s causing issues in the stock market and not the oil market crashing because of Saudi and Russian shenanigans. One things for sure, were about to find out just how low the actual floor for fracking has gotten.

  15. If the girls in the photo need gas masks, they can at least make the best of a bad situation by forming a punk band.

  16. “China has reported 3,120 deaths”

    Official Chinese government reports are either meaningless or else an indication of what’s *not* true.

    1. By which I mean, it could be that there have been 3,120 deaths, but are there *additional* deaths? We can rely on official government sources…not at all.

  17. Seems to me that the crucial statistic isn’t really the mortality rate but the question of how long American consumers cloister themselves in fear. That doesn’t depend on the mortality rate either. It’s a question of how long the virus takes to disperse through the population and be over. If it’s six to eight weeks, then we need to figure out how badly that impacts the ability of marginal businesses to finance their debt. Mortality rate, anyway, isn’t the important number. It’s a question of time. One quarter to sort through this bad. Two quarters to sort through this will be terrible. I don’t see why any bank or business would make any major plans until they know whether consumers are hiding away for two months or six, and we may not know the answer to that question for a couple of months.

    1. How the fuck will we even know it’s over?
      We wouldn’t know anything was going on if it weren’t for the freak out and nonstop talk that .000075% of the population has some fancy new flu

      1. Everywhere the virus has gone, major cities have turned into ghost towns. It doesn’t matter whether people’s behavior is rational relative to their impact on the economy. If their irrational behavior negatively impacts the economy, then that’s what it does regardless of whether you approve. Why pretend otherwise?

        Meanwhile, if the impact on the economy is mostly a function of them freaking out, then that just underscores the point the duration of the epidemic is probably more consequential than the mortality rate. The economic impact isn’t from people dying so much as it’s from consumers changing their behavior and businesses having a hard time servicing their debt because of it.

        1. And you’ve completely missed the point…

          1. The point is that if the market reacts in a certain way, your objections are irrelevant.

            That’s not missing the point–it’s just that your objections to the way consumers react to the virus is pointless.

            1. The point is the reliability of information provided, Ken, but you’re stuck on your paradigm and can’t see anything outside it.

  18. The Black Death led to an economic boom in Europe by increasing wages.

    1. Can’t tell if serious or just making fun of Krugman.

      1. Suffice it to say, labor is a resource, and like all other resources, having more of it is better–no matter what Krugnuts said about the destruction caused by hurricanes being good for the economy.

        1. I agree that labor is a resource.
          But “better” is a matter of perspective.
          Over supply certainly isn’t better for those selling labor.
          Or do you think prices will magically stay high, unlike with oil for example

          1. If an “oversupply” of labor were bad for economic growth, then the slowest growing economy in the world over the last 20 years must have been China’s and their living standards must have plummeted.

            Before the coronavirus hit, the biggest problem negatively impacting China’s growth was a lack of population growth–largely caused by their one child policy.

            https://www.theguardian.com/world/2019/mar/02/china-population-control-two-child-policy

            Your ideas about an “oversupply” of labor appear to be contradicted by reality.

            1. Wait, you’re saying that the labor market isn’t a zero-sum game? Nardz may have to rethink his entire worldview!

              1. No, I’ve never thought of people as simply widgets and units of thy God Economy

            2. If an “oversupply” of labor were bad for economic growth, then the slowest growing economy in the world over the last 20 years must have been China’s and their living standards must have plummeted.

              China has gone, economically speaking, from ‘absolutely godawful’ to ‘there are pockets of the country that can be dressed up like Potemkin villages to make foreigners feel sort of comfortable’.

              People living at the medieval peasant level herd goats and sheep through the streets of ghost cities.

              China has one of the worst economies on the globe. The serfs and slaves that labor in the factories that produce cheap goods for Americans are not an indicator of the value of an oversupply of ‘human resources’.

        2. Suffice it to say, labor is a resource,

          Labor is not a resource. It is a cost.

          No one wants production to need MORE labor.

          The less labor needed, the higher the profit.

  19. If there numbers are any where as accurate as climate change alarmism. I think we can all sleep well

  20. We’re all going to die.

  21. Fucken China.

  22. I hear Corona likes to especially target and attack Democrats and Liberals.

    Is this true?

    1. It’s just exactly the opposite. It prefers to kill old people, i.e. Republicans.

    2. Not in my city. Here it will take out 1.1% of R’s; 0.9% of D’s, 0.3% of L’s, and 0.5% of Indies

      Varies a lot also by state

      Whether that’s best case or worst case is up to you to decide

      1. Hell of a marketing opportunity for the L’s if they weren’t so effing constipated.

        Register L and reduce your chances of dying. More effective than hand sanitizer AND face masks

  23. Things usually turn out better than expected.

    1. The Precautionary Principle goes into hyper over drive with these things.

    2. Exceptions include WWI, WWII, and a few other things.

      1. Clarification: The end result of those wars was Hitler’s empire getting overthrown, which is a Good Thing, but the deaths were a Bad Thing and worse than most people, prewar, had expected.

  24. Chances are one of us here is getting coronavirus.

    1. Probably true.

      Just to be sure, we can stay in our basements until this is over.

      (much easier for some than for others)

    2. Chances are one of us here is getting coronavirus.

      Nope.

      Statistics say that all of us will get it. Possibly more than once.

      CHANCES are that several of us are typing with it.

  25. Trump breaks voter turnout records running virtually unopposed. Guest on a Sky News Australia show dismisses Trump voters as “noisy,” claiming that “quiet voters” will elect Joe Biden present. Hosts jump all over him, accusing him of hurling “deplorables 2.0.”

    After his wildly successful tour in India and recent positive television coverage in Western Europe, it’s becoming increasingly clear that President Trump is far more favorably received overseas than most Americans could possibly realize. If he manages to steer a reasonably safe course through the coronavirus typhoon and the shoals of economic panic, he might end up being the most wildly popular president in recent history worldwide.

    1. widely popular*

      My left nut for an edit button. And half my right.

      1. You know who else had only one ball?

        1. Desi Arnaz?

        2. Peyton Manning?

        3. the secret policeman?

        4. Joey One Nut?

        5. That homeless dude across the street?

  26. This is very Amazing when i saw in my Acount 8000$ par month .Just do work online at home on laptop with my best freinds . So u can always make Dollar Easily at home on laptop ,,.. Read more

  27. let’s assume the coronavirus infects people at about the same rate as a 1918 Spanish flu epidemic U.S. infection rate of 28 percent. Today that would mean that 90 million Americans would contract the virus

    If that attack rate is true and is what happens, we will have ugly fatality rates that are far worse than Wuhan or the 1918 flu. The main wave of the 1918 flu hit in 6 weeks – early October to Armistice Day – six months after the first wave. 90 million sick Americans all at once? From the early data, 14% of the positive test outcomes are serious enough to require hospitalization and for 6% or so the infection gets deeper and they require ICU type care.

    So 12.6 million people need some level of hospital/medical care – and 5.4 million need ICU or they die. Well guess what – we only have 1 million hospital beds. Only 350,000 are available at any one time. idk ICU numbers but they are obviously much much lower than that.

    Even if the number infected is only 2.8% in one month, that breaks our medical system. This is exactly why Italy is putting in quarantines now (too late). Why Korea and China did so early. To spread the caseload out so we don’t have Third World pre-modern outcomes. China had 571 reported cases and 17 dead throughout China when they locked down Wuhan. Less than the US now and far more concentrated in China then than in the US now.

    We are putting a lot of reliability even for the worst case scenario on the fatalities number from Wuhan. Assuming that they reported all fatalities. Rather than simply burning corpses found in apartments during the lockdown without trying to attribute cause of death. Only reporting fatalities/etc of those who made it into the hospital system before it too locked shut. There are obvious data integrity probs there – but there is no reason they all tilt in a direction that confirms OUR biases about how much more talented we are.

    1. let’s assume the coronavirus infects people at about the same rate as a 1918 Spanish flu

      Are you seriously believing that we have learned nothing about sanitation in a century?
      Do you really think that medical care is now the same as when you had to hitch up a horse and buggy to go get a doctor?
      That assumption is as silly as assuming the DNC will anoint Hillary again.

      1. Are you seriously believing that we have learned nothing about sanitation in a century?

        I’ve learned more about how to wash my hands in the last week than in my entire life before that. Course I didn’t even think about whether I learned the D way or the R way to do that. Obviously one is fake and the other is real and only someone who can make the connection between this virus and the DNC anointing Hillary can help guide me on the politics of hand washing.

        Do you really think that medical care is now the same as when you had to hitch up a horse and buggy to go get a doctor?

        Not at all. Back then doctors didn’t even go to the Prez for medical knowledge. They probably didn’t even have smartphones to contact him via tweet. Now we have Donald every one of these doctors said, ‘how do you know so much about this?’ Maybe I have a natural ability. Trump to help the doctors focus on what’s important – a payroll tax cut. And of course Dear Leader.

        1. “I’ve learned more about how to wash my hands in the last week than in my entire life before that”

          Umm…

          1. What can I say. I was probably the guy you shook hands with at that meeting last week. Oh – and I may have sneezed on your sandwich too. My bad.

    2. When in trouble

      Or in doubt

      Run in Circles

      Scream.

      And Shout.

  28. think of free trade killed, and illegal sub-humans thwarted as scapegoats (who would merely like to come here to earn an honest living, doing dirty work left undone by the native-born), under “Orange Man Bad”, though.

  29. “In the better-case scenario, the COVID-19 epidemic would reduce U.S. GDP by 2 percent or about $420 billion.”

    That seems to assume that the productivity average of those killed are is on par with the productivity average of society at large.

    Are the elderly, the immuno-compromised, and those with lung problems average in terms of productivity?

    1. Having millions of people sick will also reduce the GDP, for a while anyway.

  30. The actual virus? Not so much.
    The media fueled panic? Maybe a lot.
    The oil wars? Maybe a bit more.
    The outside chance the media fueled panic will get a democrat elected president? Catastrophic.

  31. Warren Buffet had a good comment relevant to what we are seeing in the financial markets. “Be fearful when others are greedy and greedy when others are fearful”

    It is time to be greedy, investment-wise. For those of us properly allocated to equities and bonds in our 401Ks and Roth IRAs, this is a wonderful rebalancing opportunity. The financial markets gave us a little blessing – take it.

    1. I’m buying stocks like crazy.

      This was the same as people who bought after the December 2018 stock drop and those who bought stocks after the March 2009 stock low point.

  32. Facebook is paying $530 Per day. Be a part of Facebook and start getting Extra Dollars every week from your home. I just got paid $8590 in my previous month. Start Getting More money and no tnsion of your Debts and other Expenses. Visit This Link and see What Facebook Owner Said..good luck…open this…….. Read more

  33. Donald Trump and Bernie Sanders actually have people who come to rallies by the thousands, Biden does not. And the deep state, the establishment, and the CIA favor Biden. And just then a virus concocted in China starts spreading….

Please to post comments

Comments are closed.