Here's a rough estimate of what Donald Trump's negligence in the face of COVID-19 has cost us (so far)
Donald Trump just hit us with the biggest tax increase in American history.
To be clear, Congress didn’t pass a bill. You won’t see a blurb about it on your tax return. But it happened.
A tax is a cost imposed on your private resources by the government for its own purposes. This one came in the form of a series of disastrously bad choices related to our response to the COVID-19 pandemic. Those choices were Donald Trump’s—often relying on his son-in-law Jared Kushner’s ill-informed advice--and they resulted in a massive, government-imposed cost on all of us.
The worst of those choices was the decision not to take action sooner. Epidemiologists Britta L. Jewell and Nicholas P. Jewell have shown that if we had done everything else exactly the same but the White House had simply issued its initial social distancing guidelines just two weeks earlier — on March 2 instead of March 16 — “an estimated 90 percent of the cumulative deaths in the United States from Covid-19, at least from the first wave of the epidemic, might have been prevented.”
Donald Trump is responsible for this, no matter what he says. He was being warned directly by advisers that such measures would be necessary well prior to March 2. In late February, almost three weeks before he finally called for “non-essential” workers to shelter in place, the respiratory-disease chief of the Centers for Disease Control and Prevention had gone public about the need for imminent school and work closures. Other countries had already provided a model for much more decisive action: seven countries imposed national social distancing guidelines prior to March 2, and 53 did sometime before the US.
We know that Trump personally chose to ignore all this and downplay the severity of the crisis, claiming that COVID-19 was no worse than the seasonal flu and insisting that the danger was being hyped to hurt his electoral prospects (see here, here, here, and here).
By intentionally impeding our national response to COVID-19 for his own (perceived) benefit, Trump created an economic levy on every American family. Some of it will paid directly through future taxes, and some indirectly through higher costs and lower incomes.
So how much will Trump’s negligence cost us?
To start with, all of the additional deaths impose a tangible cost on our society. Each of our fellow citizens is an economic engine of consumption, investment, tax revenue and production that affects the balance of trade. The aggregate of those people (and the businesses of which they are a part) is what makes up our Gross Domestic Product (GDP).
Any calculation of these costs is extremely complicated. But we can provide a pretty good estimate of what the lowest amount might be by starting with just the cost in lives lost. The economic value that we assign to a life is a topic of much debate (one of the reasons that economics is called the “dismal science” is that economists get into seemingly coldblooded but ultimately important arguments like this). There are 26 studies that the government uses for reference on this issue that peg the figure as high as $24.5 million, but agencies have coalesced around a value of approximately $10 million per life.
Official counts show approximately 98,000 US deaths so far in the pandemic. But both national and international studies have demonstrated that COVID-19 is actually leading to 50-60 percent more people dying than official tallies have recognized.
Multiplying actual total deaths by the 90 percent that were readily preventable if Trump had acted two weeks sooner, and then by the $10 million cost per life, generates a starting cost to our economy of $1.32 trillion just in the last two months.
This alone already takes us into “biggest tax increase-in-history” territory. In the past 50 years, the steepest tax hike was the “Revenue and Expenditure Control Act of 1968,” which cost 1.74 percent of our 1968 GDP. The largest tax hike ever was a rise of 5.04 percent of GDP in 1942 that went to finance America’s World War II effort. So far, the cost to our economy based on human lives lost alone is 5.71 percent of our GDP in current dollars.
But there’s more. We can also count a significant portion of the extra medical costs that we will incur, since most of the added spending will eventually get pulled from your pocket via higher insurance costs, taxes, deductibles, and premiums. A single symptomatic COVID-19 case is estimated to cost a median of $3,045. The math works out such that each additional 1 percent of the US population becoming infected costs us around $8 billion. We cannot know how many total infections we could have averted over the course of the pandemic by intervening two weeks sooner, but we do know that early action has a massive impact and that a lower curve can decrease overall infections before a pandemic is effectively halted via vaccine. If we assume that total US infections would be just 10 percent lower if Trump had allowed us to act sooner, which seems both reasonable and conservative, it would have saved us an additional $80 billion.
From there, the costs continue to mount but become harder to calculate, so it is probably prudent to be cautious. For example, the federal government has spent $2.4 trillion on COVID-19 relief, which will go directly to our national debt (contributions to Social Security have also dropped so precipitously that the trust funds may run out six years sooner, which would force the government to start borrowing hundreds of billions more within a decade to maintain benefits). We pay interest on that debt, so increasing it by around 13 percent will add some indeterminate and incredibly hard to evaluate amount to our payments, likely in the range of tens of billions a year. So it is fair to tack on a highly conservative $20 billion to the Trump Tax bill. Again, this is a lowball estimate.
And of course, there are the headline-generating economic figures of recent weeks. The U.S. economy lost over 21 million jobs in March and April, driving unemployment up to 14.7 percent. Consumer spending declined (likely as a result) 7.5 percent in March, and since that component makes up more than 2/3 of gross domestic product, GDP dropped at an annual 4.8 percent in the first quarter. But it’s insanely complicated to try to tease out what portion of it was incurred because of Trump. Plus, some of that income, spending, and economic activity is not lost but delayed.
Suffice it to say that recent manufacturing rebounds and much more limited GDP losses in China so far are highly suggestive that our own economic losses, currently (at least) in the hundreds of billions of dollars, could have been more limited if we had been able to clamp down on infections early (and had been more competent at setting up enough testing and contact tracing, which Trump also got wrong). To again be extremely conservative, if we could have avoided just 0.1 percent of GDP losses this year by having a more limited outbreak, that would have saved our economy another $20 billion – money that will go missing from our pockets.
It is worth bearing in mind that this calculation does not even take into account some substantial long-term economic impacts. For example, the combination of Trump’s failure to act decisively early, his refusal to coordinate a national re-opening strategy, and his baffling opposition to universal mask use (estimated to decrease COVID-19 transmission by 75 percent) is likely to result in a longer and deeper employment crisis. Extended joblessness can impose significant long-term costs: depressing wages for those suffering prolonged unemployment by 20 percent even up to 20 years later, and causing intergenerational wage loss for their children of as much as 9 percent.
Lives lost, medical costs, interest on the added debt, and stalled GDP…it adds up to $1.44 trillion, a staggering 6.72 percent of GDP. That’s a burden of roughly $12,000 on every American household. And that is just the toll so far, based on an ultra-cautious, lower-bound estimate of the economic damage – we are all of course all suffering untold physical, psychological, and social harms due to Donald Trump’s pandemic failure, a price that is impossible to reckon.
But we know this much. Donald Trump has succeeded in achieving a lone superlative: handing every single American the highest government bill in American history.