Author Topic: How much is this covid thing going to cost in the end?  (Read 643 times)

Razgovory

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How much is this covid thing going to cost in the end?
« on: December 29, 2020, 07:58:39 pm »
This is extremely uncharacteristic for me, but I'm actually kind of concerned about how much covid is going to cost.  I'm your typical tax-and-spend liberal who never saw an expenditure he didn't like and I'm certainly not a deficit hawk like Yi, but I'm getting kind of nervous about throwing trillions of dollars around.  I admit I don't really understand this stuff very well and I certainly don't have any idea what we could do differently, but this is a lot of money.  I imagine we'll have some sort of austerity when Biden becomes President for political reasons and that it won't be good so I can bitch about not spending enough then.  Trump is talking about a big 2000 dollar payment.  Honestly I'd rather that spread out over the next few months if we have to do shutdown again.

Here's evidence that I'm completely mad:  I don't think I should get any cash.  I won't give it back if I get it (I'm not that crazy), but I live off social security disability.  I'm not adversely affected economically by the virus since I get my check no matter if I go out or not.

I am curious though how much this thing is going to cost in both spending and loss of revenue.  Both for the US and the world as a whole.  I doubt it will be pretty.  Okay, I'm done rambling insanely for a while, maybe I'll come back latter and claim that 5G is nothing but the herald of 6G or some other crazy shit.

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Iormlund

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Re: How much is this covid thing going to cost in the end?
« Reply #1 on: December 30, 2020, 06:44:33 am »
I think the world economy will rebound very fast when this is over, unless there is something particularly unsound with the fundamentals.

I'm afraid the more lasting damage will be in another big transfer of wealth from the middle class to the billionaire few. During a crisis the first have to sell to survive, the latter can buy at a discount.

garbon

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Re: How much is this covid thing going to cost in the end?
« Reply #2 on: December 30, 2020, 09:01:40 am »
Sell what?
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Darth Wagtaros

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Re: How much is this covid thing going to cost in the end?
« Reply #3 on: December 30, 2020, 12:31:24 pm »
It's a bonanza for politicians who have politicized it.
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Re: How much is this covid thing going to cost in the end?
« Reply #4 on: December 30, 2020, 02:19:46 pm »
It's a bonanza for politicians who have politicized it.

Donald Trump disagrees with that assessment.
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Admiral Yi

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Re: How much is this covid thing going to cost in the end?
« Reply #5 on: December 30, 2020, 06:57:20 pm »
Both stimulus checks (not the unemployment top up) are pretty pointless.
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grumbler

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Re: How much is this covid thing going to cost in the end?
« Reply #6 on: December 30, 2020, 07:14:39 pm »
Stimulus checks are pretty pointless when going to families making $75,000/year, but are great for those making much less than that.  If you are already doing well, this will be just another few thousand to throw in your college savings account, or whatever.  If you aren't, this money will be spent immediately, thus stimulating the economy.

Targeted stimulus is economically sound but politically suicidal, so politicians have to do dumb stimulus.
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Sheilbh

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Re: How much is this covid thing going to cost in the end?
« Reply #7 on: December 31, 2020, 11:36:15 am »
This is extremely uncharacteristic for me, but I'm actually kind of concerned about how much covid is going to cost.  I'm your typical tax-and-spend liberal who never saw an expenditure he didn't like and I'm certainly not a deficit hawk like Yi, but I'm getting kind of nervous about throwing trillions of dollars around.  I admit I don't really understand this stuff very well and I certainly don't have any idea what we could do differently, but this is a lot of money.  I imagine we'll have some sort of austerity when Biden becomes President for political reasons and that it won't be good so I can bitch about not spending enough then.  Trump is talking about a big 2000 dollar payment.  Honestly I'd rather that spread out over the next few months if we have to do shutdown again.

Here's evidence that I'm completely mad:  I don't think I should get any cash.  I won't give it back if I get it (I'm not that crazy), but I live off social security disability.  I'm not adversely affected economically by the virus since I get my check no matter if I go out or not.

I am curious though how much this thing is going to cost in both spending and loss of revenue.  Both for the US and the world as a whole.  I doubt it will be pretty.  Okay, I'm done rambling insanely for a while, maybe I'll come back latter and claim that 5G is nothing but the herald of 6G or some other crazy shit.
It's wartime spending - cost/benefit doesn't matter anymore (no-one's expecting a full procurement process for these vaccines or hospitals saying they need more PPE), you need to pay things to keep certain bits of the economy going and you throw money at fixing/beating the problem (who gives a fuck about how much we spend on researching these vaccines or buying PPE).

The real cost is the hit from people not behaving like normal - people don't go out or spend money and a huge chunk of our economy is based on people consuming non-essential things or going holiday. It's the fripperies that employ a lot of people. The cost of people being afraid to the economy vastly outweighs the money spent by states to either support people through furlough or European part-work programs or just by directly giving people money.  The sooner we can get people back to that normal life and activity the better we will be and the benefit of that will far outweigh the cost of covid spending.

And I think this is a really interesting and important moment in the context of climate - look what we've done with these vaccines with spending by European and US governments on research (plus private sector demand). I heard a podcast recently where Adam Tooze pointed out that the US investment on "Project Warp Speed" was a rounding error in the context of general Federal spending - now imagine what we could do if that money was spent on, for example, battery research or some other even more blue sky part of the solution to climate. This is what the state can do when it's faced with real crises and it's how we need to treat climate hopefully before it's at the existential crisis stage.

The thing that worries me is the way covid has shown the lack of state capacity (in comparison with China especially but also South Korea, Australia, Japan, Taiwan, Israel) and I think Europeans and Americans need to look at and start learning some lessons. I think every Western country has seen some failing on this at some point which boils down to the state not being able to do the thing or provide the service that it's trying to (the most striking one at the minute because I follow French people on Twitter is the French vaccination program where they've only delivered about 500 doses since authorisation). That may require a long-term re-funding, or in-sourcing of certain state capacity or something but it is a concern.
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Re: How much is this covid thing going to cost in the end?
« Reply #8 on: December 31, 2020, 11:43:59 am »
The real cost is the hit from people not behaving like normal - people don't go out or spend money and a huge chunk of our economy is based on people consuming non-essential things or going holiday. It's the fripperies that employ a lot of people. The cost of people being afraid to the economy vastly outweighs the money spent by states to either support people through furlough or European part-work programs or just by directly giving people money.  The sooner we can get people back to that normal life and activity the better we will be and the benefit of that will far outweigh the cost of covid spending.

Exactly, and that's why it's pointless as Keynesian stimulus.  People have not been skipping vacation travel and restaurant meals because they lack the money, it's because they don't want to get sick and die.  Giving them money will not change that.
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Eddie Teach

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Re: How much is this covid thing going to cost in the end?
« Reply #9 on: December 31, 2020, 11:52:06 am »
So they buy a ps5 instead, isn't the economy still stimulated?
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Sheilbh

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Re: How much is this covid thing going to cost in the end?
« Reply #10 on: December 31, 2020, 12:05:27 pm »
Exactly, and that's why it's pointless as Keynesian stimulus.  People have not been skipping vacation travel and restaurant meals because they lack the money, it's because they don't want to get sick and die.  Giving them money will not change that.
Sure and I'd add they're also not doing it because of lockdowns. The vast majority of changed behaviour in most countries happpened before lockdowns and is far more tied to infection rates. But that only works as long as there's a robust welfare system that can cope with people in sectors that are badly hit and either lose their jobs or lose hours. Or the more European model of furlough where you pay businesses to keep paying their staff.

I think the latter is better because businesses who fail because of covid aren't failing because they're not generally profitable or badly run or whatever else - they're failing because there's an extreme external event going on so I think it's worth trying to back them/keep them alive until this is over.
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Admiral Yi

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Re: How much is this covid thing going to cost in the end?
« Reply #11 on: December 31, 2020, 12:29:51 pm »
So they buy a ps5 instead, isn't the economy still stimulated?

In the Keynesian model you would need Sony to invest in more  ps5 production capacity, in the expectation of increased ps5 sales on into the future.
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Admiral Yi

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Re: How much is this covid thing going to cost in the end?
« Reply #12 on: January 02, 2021, 11:24:00 am »
My stimulus check just showed up.
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