WASHINGTON (Reuters) – The United States wasted both money and lives in its response to the coronavirus pandemic, and it could have avoided nearly 400,000 deaths with a more effective health strategy and cut spending hundreds of billions of dollars while supporting those who need this.
This is the conclusion of a group of research papers released at a Brookings Institution conference this week, offering an early and broad start to what will likely be an intense effort in the years to come to assess the response to the worst pandemic of the century.
COVID-19 deaths in the United States could have remained below 300,000, up from a death toll of 540,000 and rising, if last May the country had adopted a generalized mask, social distancing and testing protocols while waiting for a vaccine, said Andrew Atkeson, professor of economics at the university. of California, Los Angeles.
He compared the patchwork state-by-state response to a car’s cruise control. As the virus got worse, people crouched down, but when the situation improved, restrictions were dropped and people were less careful, resulting in “the equilibrium level of deaths. daily … remains in a relatively narrow band ”until the vaccine arrives.
Atkeson has projected a final mortality level of around 670,000 as vaccines spread and the crisis abates. The result, if no vaccine had been developed, would have been much worse, 1.27 million, Atkeson estimated.
The economic response, while gigantic, could also have been better tailored, argued Christine Romer, a Berkeley professor of economics at the University of California. She joins former Treasury Secretary Lawrence Summers and several others from the last two Democratic administrations in criticizing spending allowed since last spring, including Team Biden’s $ 1.9 trillion US bailout.
While she said the more than $ 5 trillion federal spending related to the pandemic is unlikely to trigger a budget crisis, she is concerned that higher priority investments may be postponed due to allocations to initiatives like the Paycheque Protection Program.
These forgivable small business loans were “an interesting and noble experiment,” but were also “problematic on many levels,” including an apparent cost of hundreds of thousands of dollars for every job saved, she said.
“Spending on programs like unemployment compensation and public health was exactly what was requested,” she wrote, but other aspects, especially generous one-time payments to families, were “ largely ineffective and unnecessary ”.
“If something like the trillion dollars spent on stimulus payments that have done little to help those hardest hit by the pandemic ends up stopping spending $ 1 trillion on infrastructure or climate change over the next few years, United will indeed have made a terrible deal. Romer wrote.
Officials in the Biden administration, including Treasury Secretary Janet Yellen, argue the full package was needed to ensure all workers and their families will remain economically intact until the labor market recovers.
In another paper, Minneapolis Federal Reserve researchers Krista Ruffini and Abigail Wozniak concluded that federal programs had largely done what they wanted in supporting income and spending, with the impact seen in how whose consumption has changed in response to the approval and expiration of various government payments.
But they also found room for improvement.
Evidence of the PPP’s effectiveness in maintaining jobs, for example, was “mixed,” they found, and increases in food aid ignored things like rising food prices. groceries.
“Food insecurity remained high throughout 2020,” they noted.
The goal now, they said, should be to find out what worked to make the response to any similar crisis more effective.
“The 2020 social insurance system response has seen many successes,” they said. “Given the scope and scale of the pandemic response, it is critical that we continue to assess these efforts to understand their full scope, which populations have been helped, which have been left behind.”
Reporting by Howard Schneider; Editing by Dan Burns