As of June 1, 2020, the Congressional Budget Office estimates that the response to the corona virus will cost the US around $15 trillion. But how much is that? $1 trillion is one of those numbers that exceeds human comprehension. So this post attempts to offer some calculations to try to put the costs into perspective.
--------------------------------------------------------------------------------
Economist Antony Davies estimates that, assuming an 8% cost of capital, $15 trillion is enough to buy Spain: all the land, buildings, machines, equipment, inventories - everything.
--------------------------------------------------------------------------------
Assuming that the virus would've killed 2 million people if the US had done nothing at all, that puts the cost per life saved at about 8.5 million/life saved. (2 M potential deaths - 0.25 M actual deaths = 1.75 M lives saved. $15e15 / 1.75e6 lives = $8.5 M/life ) (Note, this ignores any lives lost due to the Covid response itself, such as suicides. It also ignores quality and length of life lost due to the Covid response--most Covid deaths are among the elderly.)
--------------------------------------------------------------------------------
The NIH budget is about $50 B per year. The NIH was founded in 1887, about 133 years ago. For the sake of argument, let's assume that the government spent the same amount (in constant dollars) on the NIH every year. (A generous assumption--NIH funding was much less in the past.) Therefore, the entire amount spent on NIH funded research for the entirety of its existence would be about $6.6 trillion ($50e9 * 133 = 6.6e12).
Therefore, US citizens will pay more than double the amount on Covid-19 remediation than the entire amount spent by the government fighting every other cause of death (from disease) from the time of the NIH's founding to the present.
--------------------------------------------------------------------------------
Economist Antony Davies estimates that, assuming an 8% cost of capital, $15 trillion is enough to buy Spain: all the land, buildings, machines, equipment, inventories - everything.
--------------------------------------------------------------------------------
Assuming that the virus would've killed 2 million people if the US had done nothing at all, that puts the cost per life saved at about 8.5 million/life saved. (2 M potential deaths - 0.25 M actual deaths = 1.75 M lives saved. $15e15 / 1.75e6 lives = $8.5 M/life ) (Note, this ignores any lives lost due to the Covid response itself, such as suicides. It also ignores quality and length of life lost due to the Covid response--most Covid deaths are among the elderly.)
--------------------------------------------------------------------------------
The NIH budget is about $50 B per year. The NIH was founded in 1887, about 133 years ago. For the sake of argument, let's assume that the government spent the same amount (in constant dollars) on the NIH every year. (A generous assumption--NIH funding was much less in the past.) Therefore, the entire amount spent on NIH funded research for the entirety of its existence would be about $6.6 trillion ($50e9 * 133 = 6.6e12).
Therefore, US citizens will pay more than double the amount on Covid-19 remediation than the entire amount spent by the government fighting every other cause of death (from disease) from the time of the NIH's founding to the present.