Many people are beginning to ask if the financial costs of the lockdown outweigh the benefits of flattening the COVID-19 curve.
This is an excellent question, particularly because no one knows the answer. And, there is a lot of financial pain out there, and it’s only going to get worse.
The conventional epidemiological wisdom is that uncontrolled pandemics do more long-term financial damage than does a controlled one.
If you think about what the economic indicators did in the immediate aftermath of realizing we had a problem—yet when govt is shown to at least be sort of engaged, things improved somewhat.
An uncontrolled outbreak probably causes more fear and panic (never a recipe for financial stability or good decision making). And panic selling is a good way to spook the whole market as everyone tries to get out before the bottom collapses. (And that’s a different issue to us small business owners or wage earner—though if the market goes down the toilet we’re probably not long for this world anyway either.)
And a medical system overwhelmed by cases (or incapacitated due to loss of heathcare staff to illness and/or fear—some might quit rather than be at risk in an apparently out-of-control situation) would have add-on effects.
One advantage of a formal shut–down is at least many people get some govt help, whereas a panic catastrophe might have a lot of job loss that was more erratic. Some employers might insist you keep coming–so people feel they have to quit to be safe, boom, no UI, etc. It’s an incredibly complex problem.
I expect this episode will be post-hoc analyzed for decades. If it ever happens again, I hope we’ll have a better idea of where the “line” is—where do the costs of isolation outweigh the benefits? No one knows, or has a good way to know.
Problem is, no one has ever tried to shut down a global economy like ours either.
And in North America we’ve had time to sit and wait and watch. Which will probably be good in the long run, but feels like a long drawn out over-reaction. A worse outcome might be an Italy—all the death AND then the financial disruption of a lockdown as people try to get a handle on things.
Other causes of death
Without lockdown you’d also get higher deaths from other causes. If you are in an MVA, and need an ICU, but can’t because they’re full of COVID, then you die—of trauma, but because of COVID. And without lockdown you continue to have the same trauma rates as usual because people aren’t staying off the roads at home. Younger people might not die, but enough end up in hospital to overwhelm it. A very tough problem.
And this is especially true because we know that financial struggle increases the risk of other causes of death–like suicide, for example. (Though maybe that would be less of a factor if we’re all going through it together for a “higher purpose”? Who knows?)
And a lot of what we need to know/ would like to know will only be known in long retrospect, I fear. I don’t think people in government or public health are ignoring that issue so much as having it be a case of so many unknowns that answering it at this stage is little better than guessing.
So you do your best to fight the demon you know, I guess.
Hang in there….