There’s no “living” with the coronavirus!

There has been a lot of discussion lately about how we might just have to get used to living with the coronavirus for a while. The authors of such articles always start out by pointing out that it will be very hard to get Americans to live with sweeping lockdowns much longer. Rather than say that this shows the need for leadership that actually believes what the scientists say, these authors always imply that it might not be so hard to live with the coronavirus after all. It’s better to just get on with our lives, and try to get the economy going to some significant fraction of what it used to be, rather than make an all-out effort to bring it under control (which doesn’t mean eradicate it, but get to the point where we know of, and have isolated, just about every infected person and their contacts). It’s clear that many leaders on both sides of the aisle think living with the virus is the only viable option. What will happen if we follow this advice?

The Washington Post (which is doing a great job of covering the crisis – in fact, I’d say they’re number one in that regard) yesterday wrote about this study directed by Dr. Michael Osterholm of the University of Minnesota (one of the other authors was Dr. Marc Lipsitch, who said in early February in the Wall Street Journal that the novel coronavirus would end up infecting between 40 and 70% of people worldwide, This forecast is looking more accurate all the time).

The study looks at past epidemics in the US and tries to predict the course of this one, based on the assumption that it won’t be controlled in any meaningful way – and I’d say that assumption is the best one you can make now. In fact, I’d say it’s become de facto national policy not even to try to control the pandemic going forward – although from initial reports from Georgia and other states that have opened up, consumers, workers and small business owners are so far mostly making the decision not to reopen on their own.

You don’t have to read the whole article (I didn’t), but if you start on page six with the paragraph that begins “Key points…” and especially focus on the three scenarios on page seven, I think you’ll see that there’s no good way forward if we don’t get the virus under control. Unless a vaccine or a total cure becomes available very soon, we’re in for at least 2-3 years of cycling in and out of lockdown mode, as waves of coronavirus keep hitting us. The worst of the three scenarios (no. 2) has the current wave of infections subsiding during the summer, but it’s followed by a much larger wave in the fall. The only way that wave will be defeated is much larger lockdowns. And there will be multiple smaller waves in 2021. This is evidently almost exactly the scenario that occurred with the “Spanish Flu” in 1918-1919 and the “Chinese Flu” pandemic of 1957-58.

The “best” of these three scenarios is no. 3. In this, the initial wave is followed by a “slow burn” into at least 2022. There aren’t big enough waves to require anything more than local or regional lockdowns, but there are infections and deaths throughout the 2-3 years. The authors point out that this scenario hasn’t occurred so far, but is at least theoretically possible.

So let’s focus on scenario no. 3. What does this mean for economic recovery? After all, the whole movement to end the lockdowns is being driven by the need for economic recovery (which nobody disputes, of course). With scenario 3 – and certain with scenarios 1 and 2 - I think it’s very simple: There will be no real recovery for years. You might say, “Well, we’ll just have to get used to the cycle of opening up and shutting down.” But that’s not a viable option. Recovery isn’t going to happen until people are convinced that the worst is behind us, and there are no more huge surprises (like the current one) on the horizon, that will throw off everybody’s plans.

Knowing that the virus is out there and still erupting at various places and times, and that it’s always possible there will be another outbreak even bigger than the one we’re going through now, people are simply going to put their lives and economic plans on hold. Who’s going to commit to going to college if they think there’s a good chance they’ll never be able to finish? Better to get some sort of low-wage job that will allow a modicum of happiness, and maybe even raising a family.

And who’s going to start a new company or build a factory if they think they’ll very possibly have to shut it down for 2-3 months next year, and maybe once or twice the following year?

But there’s a lot more to it. For someone who’s just starting their career after college – or maybe looking at where they should go to college with a future career in mind – why wouldn’t they weigh moving to another country that has had the coronavirus under control (not eradicated, mind you!) from the very beginning, and where you can be sure they’ll be able to have a real career? We may well have our own brain drain. And couple this with the likelihood that countries who don’t ban American visitors outright will at a minimum require a 14-day quarantine for Americans upon arrival. Kind of kills the summer family vacation in Europe, doesn’t it?

But here’s the worse part. As our economic prospects worsen, the US dollar will no longer be considered in some cases a better store of value than gold – which is why in some cases foreigners are literally paying the US Treasury to take their money, as they buy bonds whose price has fallen below par. We won’t be able to borrow in the nearly unlimited quantities we can today – or even just issue new dollars whenever we want (which in the end is the same thing as borrowing). So each time the virus reappears, our options for fighting it and its economic consequences will keep shrinking.

Note from Tom on 5/3: I really screwed up this last paragraph. I was right that foreigners are literally paying the US to buy some of our bonds, but I had the reason backwards. A bond is a promise to pay the buyer of the bond a certain fixed amount (called "par") on a certain date in the future. Buyers normally pay less than that fixed amount to buy the bond - the difference between what they pay and the (normally higher) amount they receive is their interest. But now buyers are bidding more than par on some shorter term bonds, meaning they're paying the US to keep their money from losing value (presumably compared to their local currencies, meaning they think the US will manage its finances better than their own government does).  

So my argument is that people are going to stop overbidding on US bonds, and - if we keep having recurring waves of the coronavirus, with corresponding lockdowns and drops in economic output - they will at some point only buy the bonds for a lot less than they would for a country that does have the virus under control. And if they don't buy our bonds (or they're not willing to accept payment for goods and services in US dollars, which amounts to the same thing economically), the US won't be able to spend the huge sums that are now necessary to keep people and businesses alive in future coronavirus waves. Meaning we'll start slipping down the economic ladder relative to other countries who do have the virus under control. And if there's a larger wave in the fall (as in scenario no. 2), we may find this starting to happen then - and it will of course only get worse in coming years, as long as we don't have the virus under control (and assuming there's no vaccine readily available).

However, I believe we will ultimately do the right thing and take the steps that are necessary to bring the virus under control: near-total lockdown for at least a month, massive testing and contact tracing, and isolating (by themselves if at all possible, not with their families) everyone who is infected or has been in close contact with someone who is. The cost to do this in February would have been a tiny fraction of what it would be today – but the cost today will be a small fraction of what it will cost say six months from now. It has to happen, but it looks like a big fall wave (which the head of the CDC also predicted a couple weeks ago, due to the coronavirus coming back on top of the normal flu wave) may be what finally convinces people of that.

The numbers

These numbers are updated every day, based on reported US Covid-19 deaths the day before (taken from the Worldometers.info site, where I’ve been getting my numbers all along). No other variables go into these numbers – they are all projections based on yesterday’s 3-day rate of increase in total Covid-19 deaths, which was 11%. Note I stopped reporting percent change in weekly deaths, since that number is meaningless when you simply project deaths using the current rate, as I’m doing.

Week ending	Deaths reported during week/month	Avg. deaths per day during week/month	Pct. Change from previous month
March 7	18	3
March 14	38	5
March 21	244	35
March 28	1,928	275
Month of March	4,058	131
April 4	6,225	889
April 11	12,126	1,732
April 18	18,434	2,633
April 25	15,251	2,179
Month of April	59,812	1,994	1,474%
May 2	14,185	2,026
May 9	18,889	2,698
May 16	23,480	3,354
May 23	31,245	4,464
May 30	39,202	5,600
Month of May	122,819	3,962	205%
June 6	48,731	6,962
June 13	64,848	9,264
June 20	81,362	11,623
June 27	101,139	14,448
Month of June	343,139	11,438	279%
Total March - June	529,829

Red = projected numbers

I. Total deaths

Total US deaths as of yesterday: 65,782

Increase in deaths since previous day: 1,911 (vs. 2,769 yesterday)

Percent increase in deaths since previous day: 3% (vs. 4% yesterday)

Yesterday’s 3-day rate of increase in total deaths: 11% (This number is used to project deaths in the table above. It was 12% yesterday)

II. Total reported cases

I no longer pay any attention to the reported case number. It is a huge underestimate of actual cases, which is probably 25-50 times reported. This is because of the huge shortage of testing capacity. If reported cases were to be anywhere near actual cases, we would need to be doing 20-30 million tests a week. I believe the US has done about 6 million tests since the start of the pandemic.

Total US reported cases: 1,131.856

Increase in reported cases since previous day: 31,660

Percent increase in reported cases since yesterday: 3%

Percent increase in reported cases since 3 days previous: 9%

III. Reported case mortality rate so far in the pandemic in the US:

Total Recoveries in US as of yesterday: 161,666

Total Deaths as of yesterday: 65,782

Deaths so far as percentage of closed cases (=deaths + recoveries): 29% (vs. 29% yesterday) Let’s be clear. This means that, of all the coronavirus cases that have been closed so far in the US, 29% of them have resulted in death. Compare this with the comparable number from South Korea, which is 3%. Do you think that might have something to do with the fact that they had fewer than 250 deaths, while we had over 55,000 deaths as of April 27?