Americans are being forced into seclusion as our leaders try to contain the coronavirus. Time will tell if this is the best policy. There are many unknowns here. But there is one thing for sure. In the process, they are crashing the economy.
The stock market has lost one third of its value. The bond markets are gyrating. Corporate debt is teetering. Businesses are being forced to close. Our Federal Reserve is printing money on a massive scale, leaving even more debt for our children and grandchildren. And our political class is squabbling who should be the biggest winners in the upcoming bail outs. These actions will have huge consequences of the health of Americans.
Thus far, the coronavirus has not caused a great deal of death and illness in the United States when compared to other recent infections. At the time of this writing, there have been about 45,000 cases and close to 550 deaths. In 2009, the Swine Flu pandemic resulted in 61 million infections and 12,500 deaths. Meanwhile, the 2019-2020 seasonal flu – which is upon us now – has resulted in 10 million cases, 280,000 hospitalizations and 16,000 deaths.
Thus, the reader may ask: Why are we making such a big deal about the coronavirus? The answer is fear of the unknown. Seasonal flus have vaccines to diminish their impact. No such vaccine exists for coronavirus. Furthermore, when one adds the potential of massive coronavirus infections to the present seasonal flu, it become obvious that if a huge number of coronavirus infections occur, the health care system will become overwhelmed, as is happening right now. Also, if the death rate of coronavirus is even as low as 1% (it is presently 7% in Italy), simple math reveals that if the same number of people are infected with the coronavirus as were infected with the Swine Flu (61 million as noted above), 610,000 people will die. This is unacceptable – especially if precautions can prevent this from happening.
But there is a trade off. The financial stress imposed on the American people by temporarily closing down our economy will result in increased numbers of hearts attacks, strokes, cancer, depression, suicide, divorce and domestic violence. Smoking, alcoholism, obesity, child abuse and substance abuse will increase. One study estimated that there were an additional 10,000 suicides after the Great Recession in 2008. Another showed an additional 18,000 cancer deaths. But most people do not have to read studies to know this. They see it happening to themselves, their families, their coworkers and their friends. Financial stress is a real killer.
But it could get worse. Some experts are predicting a depression, with unemployment in the 20% to 30% range. Others are predicting that the stimulus of trillions of dollars could lead to hyperinflation. This could lead to bank runs and riots; and worse of all – war. If the stock market valuations remain low, many retirees will be forced to go into their savings to maintain their standard of living. Three decades ago, it was possible to buy at safe 10-year treasury that paid 7%. Now the rate is 0.75%! Our leaders are trying to thread the needle between saving lives and trashing the economy – a tough dilemma.
My guess is that our leaders have about a month or two to get this virus under control. If not, too many Americans will be behind the financial eight ball and insist on going to work.
Joe Bentivegna is an ophthalmologist in Rocky Hill.