While the U.S. Congress seems likely to push through a massive $900 billion stimulus plan as soon as today, researchers are starting to crunch the numbers when it comes to the total damage done to the U.S. economy due to the COVID-19 outbreak.
For example, according to a new study conducted by researchers at the University of Southern California, the U.S. economy lost between $3.2 trillion and $4.8 trillion in real gross domestic product (GDP) over the course of two years.
Real GDP is a measure, adjusted for inflation, that reflects the value and the number of final goods and services produced by a particular country’s economy in any given year.
The research, published in the journal Economics of Disasters and Climate Change, noted that the pandemic’s economic impact largely depends on factors such as the duration and extent of the business closures, the reopening process, infection rates and fatalities, the avoidance of public places, and the level of pent-up consumer demand.
“In a best-case scenario, we would see containment measures, such as masks and social distancing become more widespread … and then businesses and institutions would be able to reopen at an accelerated pace,” the study’s team leader Adam Rose, director of the USC Center for Risk and Economic Analysis of Terrorism Events, said in a news release.
“But in a worst-case scenario, these countermeasures wouldn’t materialize, and re-openings would happen slowly, particularly because we would continue to see waves of infection. Then, more people would likely lose their jobs, and the impacts of this disaster would continue to mount.”
The study, which utilized data from computerized economic models, further revealed that mandatory closures and partial re-openings alone could result in a 22 percent loss of U.S. GDP in just one year.
Compared to China, which suffered smaller economic damage due to aggressive virus containment measures and a shorter lockdown period, the U.S. GDP loss due to the pandemic could be more than fourfold.
“The key question is: When will we see a complete reopening across this country?” Rose said.
“We simply cannot predict that, especially in light of the fact that we have not gained control of the spread of the disease.”
In another recent study conducted by Columbia University, researchers there found that as early coronavirus financial relief ended without more to follow, the number of Americans now living in poverty has surged by eight million since May.
The research added that although the federal Cares Act—which gave individuals a one-time stimulus check of $1,200 and unemployed workers an enhanced benefit of $600 each week—was largely successful in curbing rising poverty rates in the spring, the effects became much more muted as summer wore on.
The federal stimulus package likely saved about eighteen million Americans from poverty in April, the researchers added, but by fall, that figure had plummeted to four million.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.