What is a pandemic? What are the major economic and social costs of a pandemic? What is the trade-off? Which generation group and firms will suffer more? How will inequality change? Who is prioritize? What can the government do about it? What can the president do about it?
We are living in a pandemic and are being influenced by it one way or another. A pandemic is a global outbreak of a disease. They are classified as epidemics, if and only it is a disease that rapidly spreads across a particular region or regions. There are many examples in history, the most recent being the COVID-19 pandemic. One of the worst pandemics other than COVID-19 is the 1918 influenza (The Spanish flu). It was caused by an H1N1 virus with genes of avian origin. As the flu pandemic ripped through the globe, people were encouraged to wear masks (back then the US led the world in mask-wearing, making face protection mandatory), essential workplaces were kept open such as hospitals, grocery stores, etc. and social distancing was practiced as well, much like today. The flu pandemic, infected about 500 million people, one-third of the population at that time. The estimated death toll was about 50 million worldwide. The influenza pandemic cost the world $800 billion, the estimated by the world bank. In the United States alone, the initial cost of the economy was estimated to approach $166 billion, roughly about 1.5 percent of GDP in 1918. Much like back then, the economy has taken a toll. Economic issues that are facing the world economy, including regions and countries, are prospects for growth, inflation, energy and the environment, inequality, labor issues, and emerging markets. COVID-19 is estimated to cost the globe about $2.7 trillion, way more than the flu pandemic. In the US only, GDP is estimated to drop about one-third lower than at the beginning of 2020 that is shrinkage of four times faster than during The Great Depression of 1930. As recently, unemployment has been recorded to drop at a record low. That’s about 22 million people filing for unemployment as of this month (April). It all seems like the economy will not recover but it will recover just like it did after the 1918 influenza. The U.S. recovery will not be fast but it will recover. Some economists even believe that there is a possibility that growth will expand in the third quarter. The federal government has also stepped in to bridge the gaps by propping the economy up to cope with the unprecedented cataclysm. Washington has passed $2.2 trillion in relief to aid households and businesses as well as Congress is on the verge of approving an additional $500 billion in aid due to the $2.2 trillion almost running out. There are no doubts that this pandemic is hard and baring but there will be a return to trend after this large temporary shock. We just need to have hope that everything will be okay once more.