Spinal Musings

The economics of the COVID response

We had just started heading back to a new kind of normal with gyms and cinemas opening and more friends able to visit. Unfortunately, Victoria has just seen an uptick in community transmissions and now we’re moving backwards towards more social isolation. No one wants that.
Without a vaccination, isolation is the best form of prevention for this virus. 

But surely we can’t sustain this? Surely this is costing us too much money, too much unemployment and the costs of lives saved just isn’t worth it? 

The trouble is, that’s never been the issue. Health and economics goes hand in hand, and it cannot simply be regarded as an “either/or” discussion. Why do I say that?
Look at Brazil where the government did little to enforce isolation and disease prevention (as of 20 Jun 20 clevermaps.io)
  • 955,000 cases of COVID vs 7,391 here in Australia
  • 46,510 deaths in Brazil vs 102 deaths here
  • 222 deaths per million in Brazil vs 4.1 per million here
  • 0.174% GDP contraction in Brazil vs 0.011% here – we’re 15 times financially less worse off here
Sweden also makes a miserable comparison
  • 5,053 deaths vs 102 deaths here
  • 496 deaths per million vs 4.1 in Australia
  • case fatality rate of 9% vs 1.4%
  • 0.21% GDP contraction vs 0.011% here – we’re 15 times financially less worse off here
In countries where there have been large outbreaks of COVID, then both the health AND the economic consequences were worse. They go hand-in-hand. Sick people aren’t productive, don’t spend money and don’t support employment.
Like you, I find it hard to return to a higher state of isolation, but at least now I know we’re not only saving lives, but also saving jobs.