The coronavirus pandemic will cost the US an estimated $16 trillion – about 90 percent of the annual gross domestic product – in the next year, a new study suggests.
Researchers say about half of the figure, $8.6 trillion, will be due to premature deaths and those who have long-term health implications from contracting COVID-19.
Additionally, costs will pile up due to new unemployment claims from those who lost their jobs and those seeking mental health treatment.
The team, from Harvard University, says the findings suggest the costs of the crisis will far exceed those linked with The Great Recession and wars fought in Afghanistan, Iraq and Syria.
Researchers predict the coronavirus pandemic will cost the US an estimated $16 trillion, or about 90% of the annual GDP. Pictured: Medical staff treat a patient on a ventilator in the COVID-19 ICU at the United Memorial Medical Center in Houston, Texas, July 28
‘[T]he immense financial loss from COVID-19 suggests a fundamental rethinking of government’s role in pandemic preparation,’ the authors write.
‘As the nation struggles to recover from COVID-19, investments that are made in testing, contract tracing and isolation should be established permanently and not dismantled when the concerns about COVID-19 begin to recede.’
In the study, published in the Journal of the American Medical Association, the team estimates the average loss for a family of four will be nearly $200,000 either due to lost income or the effect of a shorter and less healthy life.
They estimate that, based on the current death rate, the pandemic will lead to an estimated 625,000 premature deaths in the US.
Assuming each life lost is worth $7 million, citing a review from earlier this year, this mean the economic cost of premature deaths in 2021 is estimated at $4.4 trillion.
Additionally, from those who are infected with COVID-19 but survive, the researchers estimate $2.6 trillion in treating those with long-term complications and damage.
‘Some individuals who survive COVID-19 are likely to have significant long-term complications, including respiratory, cardiac, and mental health disorders, and may have an increased risk of premature death,’ the authors write.
‘Data from survivors of COVID-19 suggest that long-term impairment occurs for approximately one-third of survivors with severe or critical disease.’
The team notes that because there are approximately seven times as many survivors of COVID-19 compared to deaths, costs of long-term care may far exceed those of deaths.
Costs are also expected to rise due to the mental health impact of the pandemic due to people suffering from the death of family or friends , fear of contracting the virus and the effects of isolation during lockdowns.
In line with previous estimates, the authors say the cost of these conditions is valued at about $20,000 per person per year.
Therefore, losses from those suffering from mental health symptoms could reach approximately $1.6 trillion.
The remaining $7.6 trillion will be due to the economic toll of lost jobs, relying on estimates from the Congressional Budget Office.
The authors note that for at least 20 weeks, beginning in late March 2020, new unemployment claims exceeded one million per week and are currently just below that amount.
Prior to the pandemic, the greatest number of weekly new unemployment insurance claims was 695,000 during the week of October 2, 1982.
In total, this means the economic cost would be four times greater than that of the Great Recession and the money spent on every war post-September 11, 2001.
The authors also suggest that more money would be saved by increased testing and contact tracing.
The team says it would cost $100 billion dollars to test and contract trace 30 million Americans per week for the next year, which would save 233,000 American lives and reduce the economic cost by about $3 trillion.