Author Topic: How long can we wait while flattening the curve?  (Read 248258 times)

afox

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Re: How long can we wait while flattening the curve?
« Reply #150 on: March 24, 2020, 02:27:04 PM »
So lets do some math shall we? This is what I got about what this is costing us.

GDP    20,000,000,000,000
Daily GDP    54,794,520,548
US population    327,000,000
Daily GDP Per Person    168
People Shutdown    158,000,000
Workers Unpaid @15%    23,700,000
Total Shutdown Cost Per Day    3,971,345,985

4 Billion Per Day. I felt I was pretty conservative. That is a pretty big dang number. Please take a look at my numbers and let me know if you see anything that looks off.

My point remains this is a huge cost. How much of this can we tolerate?

Thanks for doing the back of the napkin math but the number of "people shutdown" is way off. There are only about 158 million workers in the US, obviously not all of them are unemployed due to this.


dandarc

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Re: How long can we wait while flattening the curve?
« Reply #151 on: March 24, 2020, 02:28:25 PM »
Maybe in a few years, we'll be saying this: "In the end, it wasn't the rise of AI that brought us a UBI. It was a humble virus."

GuitarStv

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Re: How long can we wait while flattening the curve?
« Reply #152 on: March 24, 2020, 02:29:29 PM »
Yep, completely not true.

Sure groceries continues, but so does utilities, banking, home maintenance, cleaning, freight transport, mining.... I could list so many industries.

DW went to a book store yesterday to buy a puzzle and the store keeper apologised because there had been a massive run on puzzles. They received additional stock that morning and by evening they were gone.

Everywhere you look you can see commerce.

I think that might have been a bit of hyperbole.

However the point remains you simply cannot surgically cut out 50% (or 25%, 10% etc) of the economy and expect the remainder to run long on its own.

If we can't restart in April I think we are going to have a hard time restarting at all. How long are we willing to wait? How bad of a depression are we willing to stand on the side of safety?

Remember folks almost all of us on here are in most measurements freaking rich! So that has to cloud our judgement some. Sure we will likely be fine, but we are a tiny subset of the world as a whole. Lots of people simply cannot miss a week of work and stay afloat. Even more cant miss a month, let alone 2-3.

We need everyone to make the economy work, savers/spenders, rich and poor. Lets all stay home now, but we gotta get back out there sooner rather than later.

Right, that's why we need to give people who cant work due to this money. We need to take money from the people that are "rich" and working and give it to those who cant work. Getting thru this short term shutdown sounds like an accounting problem to me. The real capital (humans and organizations) that drive the economy isn't going to go away if 30% of workers stay home for a few months.

1% of people in the US own about 40% of the wealth.  Seems goofy.  I think it would make sense to skim a little off the top.

afox

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Re: How long can we wait while flattening the curve?
« Reply #153 on: March 24, 2020, 02:33:15 PM »
So lets do some math shall we? This is what I got about what this is costing us.

GDP    20,000,000,000,000
Daily GDP    54,794,520,548
US population    327,000,000
Daily GDP Per Person    168
People Shutdown    158,000,000
Workers Unpaid @15%    23,700,000
Total Shutdown Cost Per Day    3,971,345,985

4 Billion Per Day. I felt I was pretty conservative. That is a pretty big dang number. Please take a look at my numbers and let me know if you see anything that looks off.

My point remains this is a huge cost. How much of this can we tolerate?

Thanks for doing the back of the napkin math but the number of "people shutdown" is way off. There are only about 158 million workers in the US, obviously not all of them are unemployed due to this.

Also, the GDP per capita assumes we communists and we all make the same amount of money (around 67k per year), in reality we have massive inequality in the US. The sad truth is that the people that will lose their jobs to this have some of the lowest wages, the good thing about that is the rest of us could have an easier time paying them for their missed work during this event.


stoaX

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Re: How long can we wait while flattening the curve?
« Reply #154 on: March 24, 2020, 02:40:48 PM »
Trump is chomping at the bit to end the quarantines and social distancing because it's hurting his economic numbers and chance of re-election.  Just more proof that he doesn't really care about American lives and overwhelmed hospitals.   It's all about him.

https://www.cnn.com/2020/03/23/politics/trump-coronavirus-15-days-social-distancing/index.html

Or his complete lack of attention span. We've quantified his attention span: 15 days.

How much of the shutdowns and quarantines are due to the federal government and how much is done at the state and local level?  It seems to me more at the state and local level so Trump may have limited influence on whether the economy opens up again and to what extent.

LaineyAZ

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Re: How long can we wait while flattening the curve?
« Reply #155 on: March 24, 2020, 02:43:38 PM »

 . . . . .Right, that's why we need to give people who cant work due to this money. We need to take money from the people that are "rich" and working and give it to those who cant work. Getting thru this short term shutdown sounds like an accounting problem to me. The real capital (humans and organizations) that drive the economy isn't going to go away if 30% of workers stay home for a few months.
[/quote]

Agree.  I haven't seen any proposals to rescind that ridiculous 2018 tax cut/giveaway to the wealthy.  If those who benefited the most - 2/3 of the cuts went to the top 20% of earners - are truly concerned about this pandemic and financial fallout, they would be in favor of returning to the pre-Trump tax levels.  This would help alleviate the financial strain and help reduce the huge national debt.

Telecaster

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Re: How long can we wait while flattening the curve?
« Reply #156 on: March 24, 2020, 02:49:01 PM »
I remain cautiously optimistic.  Unlike 2008 or the 1970s, there is nothing wrong with the economy itself.    Unemployment figures come out on Thursday, I suspect they will shatter every record.   Certainly a lot of people will be out of work, and there will be lots of lost business.  This will cause lots of real and permanent damage that will take a while to sort out.  But it won't take forever.  And we won't have to wait for banks to start making loans again, or for high interest rates to crush inflation.  The government is throwing a couple trillion at this thing, and it will probably take a couple trillion more.  But as long as people have money in their pocket, when the smoke clears they'll start to spend it again. 


kenmoremmm

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Re: How long can we wait while flattening the curve?
« Reply #157 on: March 24, 2020, 02:52:57 PM »
...there is nothing wrong with the economy itself.

was nothing wrong.

good luck to the thousands of businesses that will no longer exist in a month.

afox

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Re: How long can we wait while flattening the curve?
« Reply #158 on: March 24, 2020, 02:55:58 PM »
as someone who is working full time remotely during this an hasnt missed a minute of work or a paycheck, im looking for ways to give money to the service workers i depend on during this. for example paying for a haircut that I usually get but wont this month, paying my local bar for the beer I would have drank but didnt drink. Id rather the govt step in and just pay people who have to shut down their buisnesses most or all of what they would normally make and raise taxes to pay for it.

I will tell you one thing I am learning from this: The USA is ABSOLUTELY RUTHLESS in its pursuit of world economic dominance. This event just proves that we value keeping stocks afloat more than keeping food on peoples table, value profits and low taxes, more than healthcare, etc. No other first world country can compete with us because they all take care of their people first. The texas gov just postulated that older americans are okay with dying to "save" the economy:
https://www.usatoday.com/story/news/nation/2020/03/24/covid-19-texas-official-suggests-elderly-willing-die-economy/2905990001/
un-fucking-real and the reason I invest in american companies!



afox

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Re: How long can we wait while flattening the curve?
« Reply #159 on: March 24, 2020, 03:06:33 PM »
...there is nothing wrong with the economy itself.

was nothing wrong.

good luck to the thousands of businesses that will no longer exist in a month.

only if we're too cheap to save them. what's going to happen is that rather than pony up to save them we are going to let additional people suffer and die so we can "open the economy" sooner, something has to give, its your money or their life. in 1944 the top tax rate in the U.S. was 94%, think we're ready to tap into the wealth at the top to save lives and businesses? neither do I.

American GenX

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Re: How long can we wait while flattening the curve?
« Reply #160 on: March 24, 2020, 04:36:14 PM »
I dislike Trump strongly too, but his point "the cure can't be worse than the disease" (paraphrasing) is true.

Are we willing to spend many trillions of dollars and collapse our economy to (maybe) save something like a million mostly elderly people?

I don't have an answer for that, but based on how we value human life in other situations with limited resources, the answer is probably "no" from a utilitarian perspective.

There's enough uncertainty about the costs on both sides of the equation that it's not cut and dried, though. The economic damage might be much greater and the lives saved less, or the economic damage might be minimal/business as usual soon and the risk to life far greater.

-W

That's the thing.  We don't really know.  FWIW, CDC reports something like 30% of hospitalizations are people under 65 (approx. number).   There is a wide range of estimates of how many might get infected with no mitigation, ranging from many tens to hundreds of millions.  If even a small percentage of those require hospitalization, we would completely wipe out all of our health care capacity in this country, which would cause many needless deaths not only among COVID patients, but among the rest of the population too.   

Then we have however many people too sick too work.  There's a cost there.  And many people survive COVID with permanent disabilities.  There's a cost there, too.

Exactly.  We must keep the social separation, isolation, lockdowns, stay-at-home guidelines and orders in place, at least until the healthcare facilities can manage the massive amount of patients, and not just large cities on the coasts that are seeing large numbers but also across the country in many locations that have yet to see the caseload explode, yet they already can't get enough PPE equipment!  We can't take our feet off the breaks.  And unlike the Governor of Texas, who would get special priority treatment, I'm not willing to sacrifice my older family, friends, and aquaintenances, nor the younger ones with underlying conditions, or even the younger healthy ones that are among that age group that becomes critically ill.

Another thing I read is that taking our foot off the brakes would probably result in twice as many deaths not to mention how harmful it would be to the healthcare system for years to come after dealing with that tragic outcome.  PTSD and more.  I don't even see it as an option at this point.  From what I've been reading, almost all health care experts agree with me, not Trump and FOX News.
« Last Edit: March 24, 2020, 04:38:27 PM by American GenX »

Mr. Green

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Re: How long can we wait while flattening the curve?
« Reply #161 on: March 24, 2020, 04:50:42 PM »
It's an all or nothing situation, and unfortunately we're not doing either. Both all and nothing would get this over with quickly, either with a lot of dead people or not, but the point is the economic engine could go back to running at full throttle. Instead, we're leaving the choke on and it's just sputtering because we're locking down areas where it spikes but not others. So people are going to continue to travel, and not think the situation is bad enough to stay home because there are still plenty of places not locked down, and that will just cause the outbreaks to hop from place to place until this whole thing has run its course. And that's assuming you can only get it once. If you can get it every year like the flu we're in for a total change in civilization without a total lockdown.

ETA: The irony of this post, coming from a guy who was asking if he should delay his multi-month camping trip is not lost on me. However, we're talking very different kinds of travel. As far as I'm concerned, if you can travel, interact with basically no one, and take proper safety precautions, you're extremely low risk. But 99% of the country doesn't travel like that.
« Last Edit: March 24, 2020, 04:53:49 PM by Mr. Green »

American GenX

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Re: How long can we wait while flattening the curve?
« Reply #162 on: March 24, 2020, 05:02:52 PM »
Instead, we're leaving the choke on and it's just sputtering because we're locking down areas where it spikes but not others.

That's not really true.  I mean, there are whole states with state-at-home orders where there are still a majority of counties without a single confirmed case.  More states have joined in that since my state did.  I saw a map recently that I wanted to attach, but I was unable to locate it now.

waltworks

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Re: How long can we wait while flattening the curve?
« Reply #163 on: March 24, 2020, 05:21:26 PM »
From what I've been reading, almost all health care experts agree with me, not Trump and FOX News.

It's their job to advocate that. They're not being asked to made a decision about tradeoffs, they are being asked how to save the maximum number of lives, regardless of cost.

It's like you asking me (I own a small bike company) how to put together the best bike. I'll come back to you with something that costs $20k and your eyes will bug out.

Ask me what I should get if my price limit is $2000, and you'll get a very different answer. Is the $20k bike objectively nicer/lighter/better than the $2k bike? Yes. Is it worth the extra $18k to you? Almost certainly not.

-W

American GenX

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Re: How long can we wait while flattening the curve?
« Reply #164 on: March 24, 2020, 05:31:34 PM »
From what I've been reading, almost all health care experts agree with me, not Trump and FOX News.

It's their job to advocate that. They're not being asked to made a decision about tradeoffs, they are being asked how to save the maximum number of lives, regardless of cost.

To be clear, I've read plenty of input from all sides, and I haven't seen anything sway my viewpoint that we need to stay the course based on results, not on picking an random date from the calendar as Trump has and saying everything will magically be ok, then.

nereo

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Re: How long can we wait while flattening the curve?
« Reply #165 on: March 24, 2020, 05:43:42 PM »
From what I've been reading, almost all health care experts agree with me, not Trump and FOX News.

It's their job to advocate that. They're not being asked to made a decision about tradeoffs, they are being asked how to save the maximum number of lives, regardless of cost.

It's like you asking me (I own a small bike company) how to put together the best bike. I'll come back to you with something that costs $20k and your eyes will bug out.

Ask me what I should get if my price limit is $2000, and you'll get a very different answer. Is the $20k bike objectively nicer/lighter/better than the $2k bike? Yes. Is it worth the extra $18k to you? Almost certainly not.

-W

OT, but do you seriously offer $20k bikes?  I’ve seen bikes that cost $6k, but never $20k.
What would it even have?  Top group sets are under $3k (from what I know).

Genuinely curious.

MKinVA

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Re: How long can we wait while flattening the curve?
« Reply #166 on: March 24, 2020, 06:01:02 PM »
I just don't think the economy is going to go down the tubes if we take a few weeks nonpublic to beat this thing. In my own large family, most are working from home at the same rate as they do in the office. Kids may be home from school, but we are still paying the teachers. My niece is still selling real estate (closing last week online and got a new client today), another works for Capital One and going strong, daughter works for medical insurance, brother works for grocery company, sister-in-law is a nurse, another brother is in broadcasting. We have lawyers working from home, even a nephew whose job at a restaurant is secure for now cause they are doing take out.

Amazon is hiring, Kroger grocery is hiring, hospitals are hiring. I am not trying to belittle anyone who has lost their job, but Congress is coming to an agreement where they will be paid through unemployment and direct payments. Will it be easy? No. During the Great Depression men were given a shovel and sent to the mountains to create our beautiful national parks. They were paid money to send home if they had family and given room and board as partial payment. People did not have food. So I am feeling pretty confident that we will get through this without people giving their lives for it.

PDXTabs

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Re: How long can we wait while flattening the curve?
« Reply #167 on: March 24, 2020, 06:04:19 PM »
Amazon is hiring, Kroger grocery is hiring, hospitals are hiring.

Yup, I have a friend that works at Kroger. She's never got this much overtime before. They'll let her work seven days a week if she wants to.

YttriumNitrate

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Re: How long can we wait while flattening the curve?
« Reply #168 on: March 24, 2020, 06:09:04 PM »
OT, but do you seriously offer $20k bikes?  I’ve seen bikes that cost $6k, but never $20k.
What would it even have?  Top group sets are under $3k (from what I know).
Genuinely curious.

Wouldn't $20k be on the low end for an Olympic velodrome bike?

waltworks

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Re: How long can we wait while flattening the curve?
« Reply #169 on: March 24, 2020, 06:32:20 PM »
OT, but do you seriously offer $20k bikes?  I’ve seen bikes that cost $6k, but never $20k.
What would it even have?  Top group sets are under $3k (from what I know).

Genuinely curious.

LOL, no. I mean, I could spec one out if you held a gun to my head, but most of my bikes end up in the $4-5k range. Still stupid expensive, but not $20k.

Really, really nice set of wheels can be $3-4k by itself. And you can go a bit crazy with fancy small-batch German carbon seatposts and such. $20k road bikes are definitely a reality - they are jokingly referred to as "dentist bikes" in the industry.

-W

mizzourah2006

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Re: How long can we wait while flattening the curve?
« Reply #170 on: March 24, 2020, 07:15:20 PM »
From what I've been reading, almost all health care experts agree with me, not Trump and FOX News.

It's their job to advocate that. They're not being asked to made a decision about tradeoffs, they are being asked how to save the maximum number of lives, regardless of cost.

It's like you asking me (I own a small bike company) how to put together the best bike. I'll come back to you with something that costs $20k and your eyes will bug out.

Ask me what I should get if my price limit is $2000, and you'll get a very different answer. Is the $20k bike objectively nicer/lighter/better than the $2k bike? Yes. Is it worth the extra $18k to you? Almost certainly not.

-W

OT, but do you seriously offer $20k bikes?  I’ve seen bikes that cost $6k, but never $20k.
What would it even have?  Top group sets are under $3k (from what I know).

Genuinely curious.

I don't know that I've ever seen a $20k bike, but I've seen plenty of $10-$12k mountain bikes. Mine was just shy of $6k new (I bought it used) and it doesn't even have a factory level fork.

waltworks

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Re: How long can we wait while flattening the curve?
« Reply #171 on: March 24, 2020, 08:44:07 PM »
Thought this was interesting and relevant:
https://theincidentaleconomist.com/wordpress/economic-cost-of-flattening-the-curve/

They conclude:
"Our calculations suggest that current strategies will be cost effective only if the predicted mortality rates are at the top of the predicted range and costs are at the bottom of the range – a combination of worst care / best case that is unlikely. Consideration of targeted mitigation strategies that minimize the economic cost while protecting the most vulnerable are warranted."

-W
« Last Edit: March 24, 2020, 08:46:39 PM by waltworks »

Luz

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Re: How long can we wait while flattening the curve?
« Reply #172 on: March 24, 2020, 10:10:13 PM »
Thought this was interesting and relevant:
https://theincidentaleconomist.com/wordpress/economic-cost-of-flattening-the-curve/

They conclude:
"Our calculations suggest that current strategies will be cost effective only if the predicted mortality rates are at the top of the predicted range and costs are at the bottom of the range – a combination of worst care / best case that is unlikely. Consideration of targeted mitigation strategies that minimize the economic cost while protecting the most vulnerable are warranted."

-W

I don't know why it's taken the economy starting to spiral for people to realize that "targeted mitigation strategies" are the way to go. The way I see it, it's not so much if the costs/benefits are worth it, but is what we're doing effective in both the short and long term and with possible consequences in mind?

In the opinion piece linked to the article you posted, the author David Katz, in talking about our current containment strategy, states: "...I fear our efforts will do little to contain the virus, because we have a resource-constrained, fragmented, perennially underfunded public health system. Distributing such limited resources so widely, so shallowly and so haphazardly is a formula for failure."

If what we're doing is effective, then I say bring on the economic costs. But oh my god, is it dumbfounding to have such high costs in relation to such a poorly applied approach. What countries have actually managed to flatten the curve and how have they done it (that's a rhetorical question)? We could do better.

afox

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Re: How long can we wait while flattening the curve?
« Reply #173 on: March 24, 2020, 10:43:59 PM »
Thought this was interesting and relevant:
https://theincidentaleconomist.com/wordpress/economic-cost-of-flattening-the-curve/

They conclude:
"Our calculations suggest that current strategies will be cost effective only if the predicted mortality rates are at the top of the predicted range and costs are at the bottom of the range – a combination of worst care / best case that is unlikely. Consideration of targeted mitigation strategies that minimize the economic cost while protecting the most vulnerable are warranted."

-W

Pretty good article... To calculate the QALY they are attributing the total cost of the stimulus efforts (1-4 trillion) to combating coronavirus. Lets say we did'nt do anything that incurred an expense, no social distancing, no expanding healthcare capacity, no shutdowns of anything. Would the markets panic? Yes they would. Would they panic more than they are panicking now? I think so. Would a stimulus be needed? You betcha! So, the authors are attributing 100% of the vast cost of the stimulus to fighing the epidemic as if the money is being spent directly on something like cancer research or developing safer cars. But that's not how the stimulus money is being spent. Most of the stimulus money so far (over 1.5 trillion) has been used to calm fears in markets by increasing liquidity by injecting cash into various areas of the financial system. How much of the trillions is actually spent combating coronavirus as opposed to easing market fears is yet to be seen but that is the amount that should be used to calculate the QALY.


nereo

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Re: How long can we wait while flattening the curve?
« Reply #174 on: March 25, 2020, 05:45:07 AM »
I’m curious about how many businesses are truly and completely “shut down,” as opposed to altered but still operational. It’s easy to conclude that most of the economy has simply stopped when all non-essential public-facing businesses have closed their doors (e.g. restaurants, retail stores, bars) but many of us continue to work in some capacity, often remotely.

Just anecdotally most of my extended family and neighbors all seem to be working from home.  Sister and her husband (both in medical fields) are working overtime, spouse is a government employee still required to go into the office (!), and of her five siblings + three spouses only one has been completely furloughed. For many of them their offices are closed to the public, but they are toiling behind the scenes doing all the jobs that can be done remotely (inventory, redesigns, remote-classroom learning, etc)

I know that there are tens-of-millions who are not working right now, but reading this thread suggests the entire economy is at a standstill, which simply isn’t true. At the same time much of this work-from-home is a stop-gap measure that can’t last forever — in many sectors there’s only so much work that can be done remotely before people need to return to cranking out wickets or whatever it is they do.

We’ll get a glimpse tomorrow when the new unemployment numbers come in how many have truly been laid off, and that’s certain to grow.  I guess my point is that just because a business is technically ‘closed’ doesn’t mean no work is being done, and no profits are being generated (either immediately or for the near future).

...early morning musings...

Miss Prim

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Re: How long can we wait while flattening the curve?
« Reply #175 on: March 25, 2020, 05:53:39 AM »
Depends on what it would cost to save them.

I mean, if every person in the world had to give up all their money and possessions to save 1 life... nobody would go for that.

And if everyone in the world could give just a few cents to save millions, it would be terrible if people refused.

There is, in fact, a price on human life (in the US, it's around $8 million):
https://www.theglobalist.com/the-cost-of-a-human-life-statistically-speaking/

-W

Would you give up all of your money and possessions to save the life of your child, grandchild, or spouse?  I know I would.
« Last Edit: March 25, 2020, 07:12:34 AM by Miss Prim »

ReadySetMillionaire

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Re: How long can we wait while flattening the curve?
« Reply #176 on: March 25, 2020, 06:17:00 AM »
I just don't think the economy is going to go down the tubes if we take a few weeks nonpublic to beat this thing. In my own large family, most are working from home at the same rate as they do in the office. Kids may be home from school, but we are still paying the teachers. My niece is still selling real estate (closing last week online and got a new client today), another works for Capital One and going strong, daughter works for medical insurance, brother works for grocery company, sister-in-law is a nurse, another brother is in broadcasting. We have lawyers working from home, even a nephew whose job at a restaurant is secure for now cause they are doing take out.

Amazon is hiring, Kroger grocery is hiring, hospitals are hiring. I am not trying to belittle anyone who has lost their job, but Congress is coming to an agreement where they will be paid through unemployment and direct payments. Will it be easy? No. During the Great Depression men were given a shovel and sent to the mountains to create our beautiful national parks. They were paid money to send home if they had family and given room and board as partial payment. People did not have food. So I am feeling pretty confident that we will get through this without people giving their lives for it.

Everyone I know who is okay with a prolonged economic shutdown is working from home in their sweats and making full pay.  It is the height of "privilege" that I see many talk about in other contexts.

I at least hope the more fortunate among us can see beyond our own immediate families to see that this has been an unmitigated disaster, already, for millions of people.

My wife, who makes $45-50k a year, has basically lost her job.  She went from 30ish hours a week to 3 or 4.  There is great concern that the business, which employs about 200 people, might go under.  We are fortunate in that we maintain a low COL, I make a good income that can cover our bills, etc.  But I'm also aware enough to recognize that most people in my position would be absolutely fucked right now.

mizzourah2006

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Re: How long can we wait while flattening the curve?
« Reply #177 on: March 25, 2020, 06:21:19 AM »
I’m curious about how many businesses are truly and completely “shut down,” as opposed to altered but still operational. It’s easy to conclude that most of the economy has simply stopped when all non-essential public-facing businesses have closed their doors (e.g. restaurants, retail stores, bars) but many of us continue to work in some capacity, often remotely.

Just anecdotally most of my extended family and neighbors all seem to be working from home.  Sister and her husband (both in medical fields) are working overtime, spouse is a government employee still required to go into the office (!), and of her five siblings + three spouses only one has been completely furloughed. For many of them their offices are closed to the public, but they are toiling behind the scenes doing all the jobs that can be done remotely (inventory, redesigns, remote-classroom learning, etc)

I know that there are tens-of-millions who are not working right now, but reading this thread suggests the entire economy is at a standstill, which simply isn’t true. At the same time much of this work-from-home is a stop-gap measure that can’t last forever — in many sectors there’s only so much work that can be done remotely before people need to return to cranking out wickets or whatever it is they do.

We’ll get a glimpse tomorrow when the new unemployment numbers come in how many have truly been laid off, and that’s certain to grow.  I guess my point is that just because a business is technically ‘closed’ doesn’t mean no work is being done, and no profits are being generated (either immediately or for the near future).

...early morning musings...

My brother-in-law owns yeast business (supplying micro-breweries) that was doing phenomenally until 3 weeks ago.and he had to lay off everyone. He employed my brother as CTO and my dad, and my sister was a SAHM with 2 young kids. So it’s already pretty much left my family devastated and we’re not talking about servers here, just people who work for a small business. They said they saw an immediate 95% reduction in orders and they were prepared for a 50% reduction in orders.

Plus remember just because many of these businesses are still open today doesn’t mean they won’t be trimming their workforce if this goes on for another 6-8 weeks.

ReadySetMillionaire

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Re: How long can we wait while flattening the curve?
« Reply #178 on: March 25, 2020, 06:45:02 AM »
I’m curious about how many businesses are truly and completely “shut down,” as opposed to altered but still operational. It’s easy to conclude that most of the economy has simply stopped when all non-essential public-facing businesses have closed their doors (e.g. restaurants, retail stores, bars) but many of us continue to work in some capacity, often remotely.

Just anecdotally most of my extended family and neighbors all seem to be working from home.  Sister and her husband (both in medical fields) are working overtime, spouse is a government employee still required to go into the office (!), and of her five siblings + three spouses only one has been completely furloughed. For many of them their offices are closed to the public, but they are toiling behind the scenes doing all the jobs that can be done remotely (inventory, redesigns, remote-classroom learning, etc)

I know that there are tens-of-millions who are not working right now, but reading this thread suggests the entire economy is at a standstill, which simply isn’t true. At the same time much of this work-from-home is a stop-gap measure that can’t last forever — in many sectors there’s only so much work that can be done remotely before people need to return to cranking out wickets or whatever it is they do.

We’ll get a glimpse tomorrow when the new unemployment numbers come in how many have truly been laid off, and that’s certain to grow.  I guess my point is that just because a business is technically ‘closed’ doesn’t mean no work is being done, and no profits are being generated (either immediately or for the near future).

...early morning musings...

My experience is anecdotal, but many businesses are taking liberties with Ohio's definition of "essential business."  The order had so many categories of "essential" business that many found a way to fit into that.  These are the businesses that have adjusted but are getting by.  I have one client doing half staff one week, half staff the next, and paying the non-working half.  Good on them.

But, any business that is not essential is getting absolutely crushed.  Almost every small business of mine -- restaurant, coffee shop, manufacturers, etc. -- are getting crushed.  Food service businesses cannot survive on takeout.  They just can't.  Interestingly, construction companies that do remodeling (instead of just new builds) are getting hammered (people don't want them in their homes).  It's a wasteland for these businesses.

mizzourah2006

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Re: How long can we wait while flattening the curve?
« Reply #179 on: March 25, 2020, 07:05:59 AM »
In a way we are finding out what it would be like if everyone embraced a mustachian lifestyle. Almost no eating out, no vacations, no going to bars/breweries, limited travel except via bike/walking. Focus on spending on food and essentials and finding cheap ways to keep yourself entertained.

Paper Chaser

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Re: How long can we wait while flattening the curve?
« Reply #180 on: March 25, 2020, 08:03:41 AM »
Thought this was interesting and relevant:
https://theincidentaleconomist.com/wordpress/economic-cost-of-flattening-the-curve/

They conclude:
"Our calculations suggest that current strategies will be cost effective only if the predicted mortality rates are at the top of the predicted range and costs are at the bottom of the range – a combination of worst care / best case that is unlikely. Consideration of targeted mitigation strategies that minimize the economic cost while protecting the most vulnerable are warranted."

-W

Just to add to this, the WHO says that a nationwide health initiative typically makes sense if the cost per QALY is 1-3 times national GDP/capita.

https://www.who.int/bulletin/volumes/94/12/15-164418/en/

US GDP per capita was $63k in 2018, so by WHO standards the cost per QALY for the US would need to be $63-$189k. We're likely to overshoot that by quite a bit.

nereo

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Re: How long can we wait while flattening the curve?
« Reply #181 on: March 25, 2020, 08:16:22 AM »
In a way we are finding out what it would be like if everyone embraced a mustachian lifestyle. Almost no eating out, no vacations, no going to bars/breweries, limited travel except via bike/walking. Focus on spending on food and essentials and finding cheap ways to keep yourself entertained.
I don’t see that as “the mustache an lifestyle”. Such measures are encouraged only when one is in a debt emergency or hasn’t/isn’t saving much. Pete likes micro breweries in particular.

Jack0Life

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Re: How long can we wait while flattening the curve?
« Reply #182 on: March 25, 2020, 08:36:53 AM »
Its pretty incredible to think that you can have a very successful business and with a shutdown for just 1 month, you can go under. This is what happening to a lot of small business.

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Re: How long can we wait while flattening the curve?
« Reply #183 on: March 25, 2020, 08:58:48 AM »
Its pretty incredible to think that you can have a very successful business and with a shutdown for just 1 month, you can go under. This is what happening to a lot of small business.

Can you call a business that produces such little surplus "very successful"? Either the owner is paying himself/herself too much or there is something else wrong with the finances.

waltworks

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Re: How long can we wait while flattening the curve?
« Reply #184 on: March 25, 2020, 09:00:35 AM »
Would you give up all of your money and possessions to save the life of your child, grandchild, or spouse?  I know I would.

Sure, but that's not the question being asked here. If you feel human life is that valuable, you should immediately stop driving your car, for instance. That's just a silly convenience, and it endangers other people - even if you're a good driver, there's a non-zero chance you'll cause a fatal accident.

So, would you give up all your money and possessions to save someone you don't know, somewhere far away? You could save lives right now by giving away all your money, why haven't you?

-W

dandarc

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Re: How long can we wait while flattening the curve?
« Reply #185 on: March 25, 2020, 09:03:33 AM »
Its pretty incredible to think that you can have a very successful business and with a shutdown for just 1 month, you can go under. This is what happening to a lot of small business.
I'd challenge whether that business is "very successful" if that is indeed true. Most small businesses are poorly managed and under-capitalized.

Most individuals are bad at managing their money, and small businesses often don't have the luxury of lots of employees available to pick out the ones who are good at that to manage their finances.

ReadySetMillionaire

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Re: How long can we wait while flattening the curve?
« Reply #186 on: March 25, 2020, 09:03:51 AM »
Its pretty incredible to think that you can have a very successful business and with a shutdown for just 1 month, you can go under. This is what happening to a lot of small business.

Can you call a business that produces such little surplus "very successful"? Either the owner is paying himself/herself too much or there is something else wrong with the finances.

Both of these posts show an ignorance of how small business actually works.  The most successful of successful restaurants operate at maybe 5% profit.  Construction companies are 8-10% profit.  Retail are maybe 5-10% profit.

The huge difference between business and a household is that their profit margins are usually thin, and their expenses are usually large.

If it's a $5M annual business with a 10% profit margin (extremely successful!), you're talking roughly $420k in revenue a month, but also $385k in expenses a month.  When revenue gets completely shut off, you can only cut so many expenses without just shutting the doors entirely.

I do not know too many businesses that keep hundreds of thousands in reserves.

And we are talking successful businesses here.  I would posit that the vast majority of small businesses are operating at less than a five percent margin.  That's at least what I see from my clients.


Bloop Bloop

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Re: How long can we wait while flattening the curve?
« Reply #187 on: March 25, 2020, 09:22:38 AM »
Its pretty incredible to think that you can have a very successful business and with a shutdown for just 1 month, you can go under. This is what happening to a lot of small business.

Can you call a business that produces such little surplus "very successful"? Either the owner is paying himself/herself too much or there is something else wrong with the finances.

Both of these posts show an ignorance of how small business actually works.  The most successful of successful restaurants operate at maybe 5% profit.  Construction companies are 8-10% profit.  Retail are maybe 5-10% profit.

The huge difference between business and a household is that their profit margins are usually thin, and their expenses are usually large.

If it's a $5M annual business with a 10% profit margin (extremely successful!), you're talking roughly $420k in revenue a month, but also $385k in expenses a month.  When revenue gets completely shut off, you can only cut so many expenses without just shutting the doors entirely.

I do not know too many businesses that keep hundreds of thousands in reserves.

And we are talking successful businesses here.  I would posit that the vast majority of small businesses are operating at less than a five percent margin.  That's at least what I see from my clients.

So that's my point. If you run a small business and the operating margin is under 5% you are probably not counted as "very successful", unless the reason the margin is so thin is because you're paying yourself 20% (in which case you can stop paying yourself). Very few restauranteurs/retailers make much money in the long run (for themselves) which just shows it's a tough industry and hard to be very successful in.

ReadySetMillionaire

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Re: How long can we wait while flattening the curve?
« Reply #188 on: March 25, 2020, 09:36:45 AM »
So that's my point. If you run a small business and the operating margin is under 5% you are probably not counted as "very successful", unless the reason the margin is so thin is because you're paying yourself 20% (in which case you can stop paying yourself). Very few restauranteurs/retailers make much money in the long run (for themselves) which just shows it's a tough industry and hard to be very successful in.

You are just so off base here I'm having a hard time determining whether you are serious.  If you think businesses that aren't profitable is just because fatcat owners are paying themselves a high salary, you're just off base. You cannot just make any margin you want.  You have to charge what the market dictates.

In construction, a new-build and its materials cost what they cost.  Everyone knows the contractor is taking a cut.  You cannot simply charge 20% profit.  The client will go to another builder.  The industry standard is 5-10%.  It just is what it is.

Restaurants are the same.  They cannot charge whatever they want for food because customers will go elsewhere.

Grocery stores operate at a fraction of a percentage for profit, because customers will just go elsewhere.

The market mostly dictates a business's profits, not some asshole greedy owner.

waltworks

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Re: How long can we wait while flattening the curve?
« Reply #189 on: March 25, 2020, 09:55:30 AM »
Bloop, I run a small business and know lots of small business owners. You are just wrong about this. You can do a fantastic conscientious job and not pay yourself crazy money in many industries and still only be making 5-10%. That's just the reality. It is not a reflection on the owner of the business being bad at it or greedy.

Even if you're operating at an awesome margin, say 50% - if you have even half of your expenses as fixed ones (paying employees, insurance, rent for your space, etc) you'll go under pretty fast if revenue goes to zero suddenly. How much of your own money are you going to plow into paying rent on an empty restaurant every month? Better to close up shop and wait for better times - but that also means now your employees and landlord are SOL.

-W

Cassie

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Re: How long can we wait while flattening the curve?
« Reply #190 on: March 25, 2020, 09:56:44 AM »
My kids are casino workers and are happy they are shutdown because they don’t want to fire for their jobs. If this goes on for months they will need to move in with us.

Telecaster

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Re: How long can we wait while flattening the curve?
« Reply #191 on: March 25, 2020, 10:20:50 AM »
Thought this was interesting and relevant:
https://theincidentaleconomist.com/wordpress/economic-cost-of-flattening-the-curve/

They conclude:
"Our calculations suggest that current strategies will be cost effective only if the predicted mortality rates are at the top of the predicted range and costs are at the bottom of the range – a combination of worst care / best case that is unlikely. Consideration of targeted mitigation strategies that minimize the economic cost while protecting the most vulnerable are warranted."

-W

That was quite interesting.  One quibble though:

Quote from: from the article
A pandemic that is likely to lead to 1.7 million deaths can justify the enormous public costs. However, if the pandemic is in the lower end of the predicted range, then the public funds would have been more valuable if spent elsewhere.

But the question isn't where to spend the funds.  The question is how much to spend on this issue, right?   In other words, the money we're currently spending on COVID isn't available to spend elsewhere in the health care system. 

mm1970

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Re: How long can we wait while flattening the curve?
« Reply #192 on: March 25, 2020, 10:45:11 AM »
Instead, we're leaving the choke on and it's just sputtering because we're locking down areas where it spikes but not others.

That's not really true.  I mean, there are whole states with state-at-home orders where there are still a majority of counties without a single confirmed case.  More states have joined in that since my state did.  I saw a map recently that I wanted to attach, but I was unable to locate it now.
my state has a stay at home order, but that didn't prevent people from driving a few hours to rent a house for spring break.

fattest_foot

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Re: How long can we wait while flattening the curve?
« Reply #193 on: March 25, 2020, 10:46:22 AM »
Everyone I know who is okay with a prolonged economic shutdown is working from home in their sweats and making full pay.  It is the height of "privilege" that I see many talk about in other contexts.

I at least hope the more fortunate among us can see beyond our own immediate families to see that this has been an unmitigated disaster, already, for millions of people.

My wife, who makes $45-50k a year, has basically lost her job.  She went from 30ish hours a week to 3 or 4.  There is great concern that the business, which employs about 200 people, might go under.  We are fortunate in that we maintain a low COL, I make a good income that can cover our bills, etc.  But I'm also aware enough to recognize that most people in my position would be absolutely fucked right now.

Don't forget that most of us who are doing things like working from home or are not generally impacted by this are self selected. We have a bias circle that we interact with by where we live, the jobs we have, etc. Even your grocery store is probably staffed by people that are more well off just because they work at the grocery store YOU go to.

mm1970

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Re: How long can we wait while flattening the curve?
« Reply #194 on: March 25, 2020, 10:47:59 AM »
I just don't think the economy is going to go down the tubes if we take a few weeks nonpublic to beat this thing. In my own large family, most are working from home at the same rate as they do in the office. Kids may be home from school, but we are still paying the teachers. My niece is still selling real estate (closing last week online and got a new client today), another works for Capital One and going strong, daughter works for medical insurance, brother works for grocery company, sister-in-law is a nurse, another brother is in broadcasting. We have lawyers working from home, even a nephew whose job at a restaurant is secure for now cause they are doing take out.

Amazon is hiring, Kroger grocery is hiring, hospitals are hiring. I am not trying to belittle anyone who has lost their job, but Congress is coming to an agreement where they will be paid through unemployment and direct payments. Will it be easy? No. During the Great Depression men were given a shovel and sent to the mountains to create our beautiful national parks. They were paid money to send home if they had family and given room and board as partial payment. People did not have food. So I am feeling pretty confident that we will get through this without people giving their lives for it.

Everyone I know who is okay with a prolonged economic shutdown is working from home in their sweats and making full pay.  It is the height of "privilege" that I see many talk about in other contexts.

I at least hope the more fortunate among us can see beyond our own immediate families to see that this has been an unmitigated disaster, already, for millions of people.

My wife, who makes $45-50k a year, has basically lost her job.  She went from 30ish hours a week to 3 or 4.  There is great concern that the business, which employs about 200 people, might go under.  We are fortunate in that we maintain a low COL, I make a good income that can cover our bills, etc.  But I'm also aware enough to recognize that most people in my position would be absolutely fucked right now.
I'm okay with a prolonged shutdown, but I'm a mustachian and we are both working from home BUT I also think that our tax dollars should go to making sure that everyone who isn't working has a roof and is fed.

I mean, we should do that normally, and we don't. 

fattest_foot

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Re: How long can we wait while flattening the curve?
« Reply #195 on: March 25, 2020, 10:50:43 AM »
Bloop, I run a small business and know lots of small business owners. You are just wrong about this. You can do a fantastic conscientious job and not pay yourself crazy money in many industries and still only be making 5-10%. That's just the reality. It is not a reflection on the owner of the business being bad at it or greedy.

Even if you're operating at an awesome margin, say 50% - if you have even half of your expenses as fixed ones (paying employees, insurance, rent for your space, etc) you'll go under pretty fast if revenue goes to zero suddenly. How much of your own money are you going to plow into paying rent on an empty restaurant every month? Better to close up shop and wait for better times - but that also means now your employees and landlord are SOL.

-W

It's also a ridiculous statement to make. "Why aren't these businesses holding months of cash?" Are you serious? You realize that cash for a business sitting idle could be much better used to...make more cash flow?

mizzourah2006

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Re: How long can we wait while flattening the curve?
« Reply #196 on: March 25, 2020, 11:17:38 AM »
Bloop, I run a small business and know lots of small business owners. You are just wrong about this. You can do a fantastic conscientious job and not pay yourself crazy money in many industries and still only be making 5-10%. That's just the reality. It is not a reflection on the owner of the business being bad at it or greedy.

Even if you're operating at an awesome margin, say 50% - if you have even half of your expenses as fixed ones (paying employees, insurance, rent for your space, etc) you'll go under pretty fast if revenue goes to zero suddenly. How much of your own money are you going to plow into paying rent on an empty restaurant every month? Better to close up shop and wait for better times - but that also means now your employees and landlord are SOL.

-W

It's also a ridiculous statement to make. "Why aren't these businesses holding months of cash?" Are you serious? You realize that cash for a business sitting idle could be much better used to...make more cash flow?

Yup, my bro-in-law was in the process of building a new building to increase capacity and offer a tap-room like experience where people could see the impact different yeast strands had on the same beers. You can't just stop paying the contractors because your revenue dried up in a month. Most businesses have contingency plans to deal with temporary drops in revenue. He had one for a 50% drop. But why would anyone build a contingency plan for a 90-95% drop in monthly revenue? At that point, your thought is the business has failed. But clearly that's not going to be the case for most of these small businesses. He went from consistent demand growth to no demand in the period of a few weeks.

afox

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Re: How long can we wait while flattening the curve?
« Reply #197 on: March 25, 2020, 11:25:14 AM »
Would you give up all of your money and possessions to save the life of your child, grandchild, or spouse?  I know I would.

Sure, but that's not the question being asked here. If you feel human life is that valuable, you should immediately stop driving your car, for instance. That's just a silly convenience, and it endangers other people - even if you're a good driver, there's a non-zero chance you'll cause a fatal accident.

So, would you give up all your money and possessions to save someone you don't know, somewhere far away? You could save lives right now by giving away all your money, why haven't you?

-W

The car driving analogy doesnt make sense. Transportation is necessary. If people didnt drive they would use some other form of transportation which would also have a fatality rate.

Also, Coronavirus is actually far deadlier than the flu or car crashes
In 2018, roughly 36,560 people died in automobile accidents. Another 38,000 died from flu-related causes in the winter ending that same year.

We don’t yet know how many deaths the coronavirus will cause. But a recent study pegged the mortality rate for symptomatic coronavirus cases at 1.4 percent. That may not sound devastating in a vacuum, but it is significant, as that rate means the coronavirus could kill up to 1.1 million Americans if allowed to spread unchecked.

Also, ya'all are attributing the entire cost of the stimulus and lost the lost jobs to control and response efforts. If we did nothing, no forced closures the markets would still be freaking out and lots of people would be losing their jobs and we would still have a stimulus. I think the markets would actually freak out more and the background problem would be worse.



waltworks

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Re: How long can we wait while flattening the curve?
« Reply #198 on: March 25, 2020, 11:30:13 AM »
Fatality rates for riding the bus are a tiny fraction of those for driving cars. You'd also have less pollution, which definitely saves lives in many places, and less GHG emissions - which you could argue will save lives in the future.

Your car is killing people. Yet we both own and drive them.

To use another transportation example, there's no need to drive 75 on the freeway. We could set the speed limit to 40, and it would MASSIVELY reduce fatalities. But we don't, because we don't place an infinite value on life.

-W
« Last Edit: March 25, 2020, 11:35:56 AM by waltworks »

nereo

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Re: How long can we wait while flattening the curve?
« Reply #199 on: March 25, 2020, 11:39:41 AM »
Fatality rates for riding the bus are a tiny fraction of those for driving cars.

To use another transportation example, there's no need to drive 75 on the freeway. We could set the speed limit to 40, and it would MASSIVELY reduce fatalities. But we don't, because we don't place an infinite value on life.

-W

We did this to some degree back in the 1970s in response to the oil crisis; to receive federal transportation funding all interstates had to have their speeds no higher than 55mph (the 'National Maximum Speed Law').  Vehicular fatalities went down.  Fuel efficiency rose (slightly).  But of course convenience and speed ultimately won out over safety and the environment. 'Course improvements to safety  features (speedbelts, crumple zones) and increased urbanization makes correlations difficult.