The US COVID response could have avoided hundreds of thousands of deaths: research

WASHINGTON (Reuters) – The United States has wasted both money and lives in its response to the coronavirus pandemic and could have avoided nearly 400,000 deaths with a more effective health strategy and reduced federal spending by hundreds of billions of dollars, supporting at the same time those who needed it.

This is the conclusion of a group of research papers launched at a Brookings Institution conference this week, providing an early and comprehensive start to what will likely be an intense effort in the coming years to assess the response to the worst pandemic in a century. .

Deaths in the US COVID-19 could have remained below 300,000, compared to a death toll of 540,000 and rising, if by May last year the country had adopted the wide mask, social distancing and testing protocols pending a vaccine, estimated Andrew Atkeson, a professor of economics at the University of California, Los Angeles.

He compared the state-to-state response, with patches, to the car’s speed control. As the virus worsened, people spread, but when the situation improved the restrictions were abandoned and people were less careful, resulting in “the equilibrium level of daily deaths … remains in a relatively narrow band.” until the vaccine arrives.

Atkeson projected a final fatality level of about 670,000 as vaccines spread and the crisis disappeared. The result, if no vaccine had been developed, would have been far worse than 1.27 million, Atkeson estimated.

The economic response, though mammoth, could also have been better adapted, said Christine Romer, a professor of economics at the University of California, Berkeley. She joins former Treasury Secretary Lawrence Summers and a few others in the last two Democratic administrations to criticize authorized spending since last spring, including Biden’s $ 1.9 trillion US rescue plan.

Although she said the government’s more than $ 5 trillion pandemic spending is unlikely to trigger a fiscal crisis, she worries that higher-priority investments will be delayed due to allocations to initiatives such as the Wage Protection Program.

Those unforgivable small business loans were “an interesting and noble experiment,” but they were also “problematic on many levels,” including an apparent cost of hundreds of thousands of dollars for every job saved, she said. .

“Expenditure on programs such as unemployment compensation and public health was exactly what was required,” she wrote, but other issues, especially generous single payments to families, were “largely inefficient and wasteful.”

“If something like a billion dollars spent on stimulus payments that didn’t help those most affected by the pandemic ends up spending $ 1 trillion on infrastructure or climate change in the next few years, the United States will be done. a very bad business “, Romer wrote.

Biden administration officials, including Treasury Secretary Janet Yellen, say the full package was needed to make sure all workers and families are kept economically intact until the labor market recovers.

In a separate paper, Federal Reserve researchers in Minneapolis, Krista Ruffini and Abigail Wozniak, concluded that federal programs did much of what they intended by supporting revenues and expenditures, with the impact observed in the way consumption changed in response. upon approval and expiration of various government payments.

But they also found room for improvement.

Evidence of PPP efficiency in job retention, for example, has been “mixed”, they found, and increases in food assistance have not mattered as higher food prices.

“Food insecurity has remained high throughout 2020,” they said.

The goal now, they said, should be to determine what worked to make the response to any similar crisis more effective.

“The response of the social security system in 2020 has been very successful,” they said. Given the scope and extent of the pandemic response, it is essential that we continue to assess these efforts to understand the full extent of their coverage, which populations have been helped, which have been left out. ”