What I am expecting
I have been tracking the growing epidemic of the corona virus very closely for 2 months, and moderate a growing group of about 700 very smart people on Facebook, at https://www.facebook.com/groups/coronaecon/. I am not an epidemiologist, but I am highly quantitative. Here’s my best guess at where we are heading.
Peak Cases: Mid-End April
If we look at Italy, which is a pretty close approximation to the US case, but with a 2 week head start in terms of response, it took a full 11 days from a nationwide lockdown to even start showing a peak in new cases. This may very well not be the peak, but mathematical models of virus spreading indicate to me that it very well could be.
What I think that means is the US will probably peak in 2–3 weeks in terms of new cases.
Given that we will be at 100K cases by Friday March 27, and that we are doubling every 3 days, with no realistic chance of this changing in the next 15 days, we can expect 5 doublings 100K →200K →400K →800K →1.6 Million cases by April 15. Let’s round down to 1MM.
With mortality rates of 1%-2%, and a 2 week case-mortality lag we can assume there will be 20K deaths by end of April. Again, this is still less than flu deaths, if we contain it at these levels.
Summary: 1 Million Cases, 20K deaths in April.
The First Recovery: May
May is when we can start, and only start moving out of our quarantines. Note that at this point we will have 1 Million confirmed cases, and while new cases will start to go down, we will trend to something like 1.5–2MM total US population infected (many wont be diagnosed). If you are over 65, or at risk, it will not be safe to get back to work.
I expect all of may to still be a ghost town in major American cities.
Meanwhile, unemployment will reach epic levels.
- restaurant workers will still be out of work
- retail will be operating at 10% capacity
- very few people will fly
20% unemployment seems a very likely possibility. And add to this a possible increase in price in basic necessities.
If you look at the great depression, it took 3 years (1932 to 1935) to come down from the 20%+ peak unemployment levels.
The WildCard: What will unemployment look like at election time?
Even if we are well peaked in terms of infection by November, it’s not at all clear that the unemployment problems caused by COVID19 will be resolved. Many travel, hospitality and leisure jobs will be eliminated for a minimum of 1 year. While Boeing and other fortune 500 companies will be bailed out, mom and pop small businesses will have a very, very hard time.
If there is continued long unemployment, we will need further bailouts beyond the $1,200 one-time handouts. Social unrest is likely to accelerate. And healthcare in general is going to become a massive flashpoint.
We need a way to help out these vast numbers of people who will be without income — beyond the current stimulus bill. I strongly suggest a digital dollar + wallet as a way to do this. Here’s what that could look like.