Washington, Oct 13 (IANS) The Covid-19 pandemic will cost the US $16 trillion, or approximately 90 per cent of the annual GDP, former Treasury Secretary Lawrence Summers said.
Roughly half of this amount is the lost income from the pandemic-induced recession, and the remainder is the economic effects of shorter and less healthy life, Summers and Harvard University economist David Cutler said in a joint article published online in the Journal of the American Medical Association on Monday.
The economic loss will be four times the cost of the 2007-09 Great Recession, and it is more than twice the total spending for all the wars the US has fought since September 11, 2001, including those in Afghanistan, Iraq, and Syria, the authors noted.
For a family of four, the estimated loss would be nearly $200,000, according to the article.
Summers, who was Treasury Secretary for former President Bill Clinton and economic adviser to former President Barack Obama, is also a professor at and past president of Harvard University.
Cutler and Summers said lower output is not the only economic cost of COVID-19, noting that death and reduced quality of life also can be measured in economic terms.
For example, with the technique of valuing “statistical lives” — which measures how much it is worth to people to reduce their risk of mortality or morbidity — the economic cost of premature deaths expected through the next year is estimated at $4.4 trillion.
“The immense financial loss from Covid-19 suggests a fundamental rethinking of government’s role in pandemic preparation,” the authors were quoted as saying in the article.
They highlighted the importance of wide-scale testing, contact tracing and isolation, noting that “increased investment in testing and contact tracing could have economic benefits that are at least 30 times greater than the estimated costs of the investment in these approaches”.
The article comes as the US continues to be the worst-hit country with the world’s highest number of coronavirus cases and deaths at 7,803,884 and 214,063, respectively.
–IANS
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