The Real Cost of COVID: Grand Total: $5.587 trillion!!
BY DOUG CARDELL Ph.d. the Oracle of Oracle | March 24, 2024
The COVID pandemic had an unprecedented human cost: illness, death, mental health issues, and life disruption. Those are beyond price. However, I can calculate the financial cost of the pandemic; here are the results.
First, the government spending:
Stimulus and Relief Package 1
- Funding for research for a vaccine.
- Giving money to state and local governments to fight the spread of the
- virus.
- Allocating money to help stop the spread of the virus overseas.
Cost: $8.3 billion.
Stimulus and Relief Package 2
- Providing money for families who rely on free school lunches.
- Tax credit to help employers cover the costs of sick leave.
- Providing nearly $1 billion in additional unemployment.
- Funding and cost waivers to make COVID-19 testing free.
Cost: $3.471 billion.
Stimulus and Relief Package 3
- One-time, direct cash payment of $1,200 per person plus $500 per child.
- Expansion of unemployment.
- Additional $600 of unemployment per week.
- $500 billion in government lending to companies affected by the pandemic.
- $349 billion in loans and grants to small businesses.
- More than $175 billion for hospitals and healthcare providers.
- $150 billion in grants to state and local governments.
- $30.75 billion for schools and universities.
Cost: $2.3 trillion
Stimulus and Relief Package 3.5
The Paycheck Protection Program Flexibility Act of 2020, which modified
the PPP, was signed into law on June 5, 2020.
Cost: $484 billion
Stimulus and Relief Package 4
- Direct payments of $600 per person, including for dependents ages 16 and
- younger, to individuals making up to $75,000 annually.
- Eleven weeks of expanded unemployment benefits expanded by $300 a
- week.
- The Pandemic Unemployment Assistance (PUA) program for self-employed
- and contract workers was extended.
- $325 billion in help for small business loans.
- Additional transportation funding.
- Public health measures include testing and tracing, Biomedical Advanced
- Research and Development Authority, the CDC and state governments for
- vaccine distribution, and supporting healthcare providers.
- Education funding includes a K–12 Emergency Relief Fund and a Higher
- Education Emergency Relief Fund.
- Emergency rent assistance.
- Nutrition and agriculture funding, including a 15% increase in
- Supplemental Nutrition Assistance Program benefits and food bank funding.
Cost $900 billion.
Stimulus and Relief Package 5: American Rescue Plan
- Funding was allocated to state and local governments.
- Cash payments of up to $1,400 for individuals earning less than $75,000 a
- year, plus $1,400 per dependent. The payment decreased for those with
- income over $75,000, phasing out entirely for individuals with an income of
- $100,000 a year.
- Increasing the maximum annual Child Tax Credit.
- Unemployment insurance.
- Unemployment benefits were free from federal taxes in 2021 for households
- with incomes less than $150,000 yearly.
- Funding for K–12 schools.
- To administer and distribute vaccines, diagnose and track COVID-19
- infections, and purchase testing and personal protective equipment
- supplies.
- Funding for higher education.
- Funding for public transit.
- Emergency rental assistance.
- Small Business Administration can make grants for restaurants and bars.
- Funds for childcare and to help providers continue operating and meet
- payroll.
- Support for airline industry workers.
- Additional PPP funding and expanding which nonprofits can benefit from
- the program.
Total cost: $1.9 trillion
Grand Total: $5.587 trillion.
But government spending was only a little more than a quarter of the total economic cost. From 2020 to 2023, the cumulative Gross Domestic Product (GDP) of the United States was about $103 trillion. My models indicate that without the pandemic, the total GDP would have been $117.4 trillion in inflation-adjusted 2020 dollars over those four years. This loss in GDP brings the total cost to the US economy to about 20 trillion dollars.
From my years as a math teacher/professor, I know that numbers that large are almost incomprehensible. If we were to spend a million dollars a minute, how long would it take to spend 20 trillion dollars? Take a guess. Let’s do the math: $20,000,000,000,000 divided by $1,000,000/min =20,000,000 min divided by 60 min/hr. = 333333.33 hrs. divided by 24hrs./day = 13888.9/365.25 days/yr. = 38.026 yrs. Was your guess close?
Most of this cost resulted from lockdowns, which proved ineffective. The data shows that about 75% of the COVID spread was due to household and social gatherings, another 7% was spread in healthcare facilities, 2% in higher education, 1.5% in education employees, 1.43% in restaurants and bars, 1.06% in travel, 1.03 in sports, 1% in public sector employees, and less than 1% in all other categories. In total, less than 20% of the spread of the virus could have been affected by lockdowns, and further study shows that even that 20% was largely unaffected by them. Analyzing the lockdown measures of the states in the US, there is no relationship between lowered economic activity due to lockdowns and mortality. The economic costs of COVID are almost all a result of federal, state, and local governments over-reacting and doing more harm than good.
I hope this will serve as a cautionary tale that will improve government reaction next time there is an emergency, but I’m not optimistic.
What is the cost to us, as citizens of this country of the inflation that is the result of the infusion on trillions of dollars into the economy?