The COVID lockdown and spendathon – was it worth it and what is to be done?

I have a piece in Quadrant where I estimate the person-years lives saved in Australia at 80,000. Each person-year is worth, on the government’s data, $219,000, hence saving is quantified at $17 billion.

The cost in outlays and lost production I estimate at $235 billion, fourteen fold the benefits in lives saved.

If however the initial health experts estimates of likely deaths without a lockdown had proved accurate the value of the lives saved would have been $526 billion, ostensibly far in excess of the costs incurred.

But we have to be wary of applying these high values per life saved in the context of very large numbers since costs per person become increasingly unaffordable as the numbers to be saved increase. More importantly, we have to have a better fix on health projections than one that, in this case, appears to have over-estimated the death rate thirtyfold.

Another piece in the Spectator reviews the Australian taxpayers’ costs relative to those of other countries and itemises the details.  The Australian Government has been far more generous with our money than that of all identified countries save Japan and the US – a fact regarding which ministers were preening themselves until recently when the Treasurer suddenly started referring to the weekly cost.

The Spectator piece adverts to some of the means by which the costs can be met.  Included among these is:

  • a tax surcharge on those not regulated out of their jobs,
  • cancel submarines,
  • restore water to Murray irrigators,
  • abandon renewable subsidies and the Snowy 2 folly.

Do we have a government astute and bold enough to address such fundamental issues or would it prefer to sail ahead with policy measures that don’t offend voters but ensure a broken economy?

 

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35 Responses to The COVID lockdown and spendathon – was it worth it and what is to be done?

  1. Mak Siccar

    An extract from …

    https://www.spectator.co.uk/article/does-lockdown-really-decrease-covid-deaths

    Measures to flatten the curve might have an effect, but a lockdown only pushes the severe cases into the future – it will not prevent them. Admittedly, countries have managed to slow down the spread so as not to overburden health-care systems, and, yes, effective drugs that save lives might soon be developed, but this pandemic is swift, and those drugs have to be developed, tested, and marketed quickly. Much hope is put in vaccines, but they will take time, and with the unclear protective immunological response to infection, it is not certain that vaccines will be very effective.

    In summary, Covid-19 is a disease that is highly infectious and spreads rapidly through society. It is often quite symptomless and might pass unnoticed, but it also causes severe disease, and even death, in a proportion of the population, and our most important task is not to stop the spread, which is all but futile, but to concentrate on giving the unfortunate victims optimal care.

  2. Hay Stockard

    Never trust the Government. Ever. No exceptions.

  3. skew_wif

    Would it have happened at all if the “experts” read their own publication?

    In Australia, although an average of 85 deaths and approximately 4000 hospitalisations directly
    attributed to influenza are notified annually, it has long been recognised that
    this is a substantial underestimate of the impact of influenza. It is estimated that
    there are an average of over 13 500 hospitalisations due to influenza per year in
    Australia and over 3000 deaths per year in Australians aged over 50 years alone.

    Source Aust Gov Dept of Health The Australian Immunisation Handbook 10th edition ( updated June 2015)

  4. Robber Baron

    Governments have made the case for limited government. Very limited.

  5. Matt

    Current mortality in Australia from COVID – 4 per 1 million
    This compares to Spain 550, Italy 490, UK 440, France 395, Netherlands 300, Sweden 291 and USA 226 amongst others.
    You can believe that Australia was just lucky to only experience a mortality rate of 50-100 times less than these countries, or you can believe that the restrictions put in place had an effect. It is not a theoretical exercise, because we have the evidence from other countries – particularly ones where there is evidence that all-cause mortality is significantly higher than normal. Without going further into the methodology above related to age range (which will increase with a higher mortality rate than what we are seeing in Australia currently), the estimate of person-years lives saved in Australia of 80,000 ($17 billion) is a gross underestimate – unless you truly believe that the mortality rate wouldn’t have been higher in Australia without these restrictions.

  6. Entropy

    Of those options they will go for a tax surcharge, ignore the others and probably raid super.

  7. Tim Neilson

    You can believe that Australia was just lucky to only experience a mortality rate of 50-100 times less than these countries, or you can believe that the restrictions put in place had an effect.

    Or you can wonder whether we’ve just kicked the can down the road. Note that all the countries you mention are coming out of winter rather than going into it.

    we have the evidence from other countries – particularly ones where there is evidence that all-cause mortality is significantly higher than normal.

    Why shouldn’t we draw conclusions from the ones where it isn’t?

  8. OldOzzie

    Show Your Work! Ferguson Sex Scandal Prompts Calls for UK Govt to Release Coronavirus Models

    Ferguson’s Imperial Model
    May 6, 2020 Rand Simberg 5 Comments

    A code review.https://lockdownsceptics.org/code-review-of-fergusons-model/

    The code. It isn’t the code Ferguson ran to produce his famous Report 9. What’s been released on GitHub is a heavily modified derivative of it, after having been upgraded for over a month by a team from Microsoft and others. This revised codebase is split into multiple files for legibility and written in C++, whereas the original program was “a single 15,000 line file that had been worked on for a decade” (this is considered extremely poor practice). A request for the original code was made 8 days ago but ignored, and it will probably take some kind of legal compulsion to make them release it. Clearly, Imperial are too embarrassed by the state of it ever to release it of their own free will, which is unacceptable given that it was paid for by the taxpayer and belongs to them.

    Good lord.

    This reminds me an awful lot of the code that was leaked from CRU. S**t climate coding has done a lot of economic damage, but nowhere near as rapidly as this has, with tens of thousands of deaths to boot.

    [Update a few minutes later]

    A devastating conclusion:

    All papers based on this code should be retracted immediately. Imperial’s modelling efforts should be reset with a new team that isn’t under Professor Ferguson, and which has a commitment to replicable results with published code from day one.

    On a personal level, I’d go further and suggest that all academic epidemiology be defunded. This sort of work is best done by the insurance sector. Insurers employ modellers and data scientists, but also employ managers whose job is to decide whether a model is accurate enough for real world usage and professional software engineers to ensure model software is properly tested, understandable and so on. Academic efforts don’t have these people, and the results speak for themselves.

    Same with climate modeling. Get it out of the universities. Particularly Penn State.

    [Update a while later]

    What Ferguson’s booty call tells us about our “elites.”

  9. egg_

    Since CAGW has been “solved” with Renewables and the movement has basically stalled, the Progressive Left’s new threat is a Global Pandemic, which became fashionable a year ago, with staged reactions, e.g. a BBC Medico being Patient Zero in Contagion! and the meme featuring in TEDx Talks, e.g. “Epidemics and the end of humankind” | Rosalind Eggo – the sky is falling again!

    In 2020, with CV-19, they thought they found what they were looking for, aided and abetted by cranks from both sides of the political spectrum.

  10. Ed Case

    Of those options they will go for a tax surcharge, ignore the others and probably raid super.

    Plenty of unemployed have taken the opportunity to raid $10,000 out of their Super before June 30.
    I’d like to see it become an issue in the Eden-Monaro by election.
    Labor leave your money in vs Liberal double up after July 1.

  11. Sydney Boy

    How much is Australia’s largest solar farm being subsidised by government?

  12. OldOzzie

    Oops – Reference Ferguson’s Imperial Model
    May 6, 2020 Rand Simberg 5 Comments

    http://www.transterrestrial.com/2020/05/06/fergusons-imperial-model/

  13. egg_

    Spain 550, Italy 490, UK 440, France 395, Netherlands 300, Sweden 291 and USA 226 amongst others.

    Can you explain the difference, even amongst the Northern Hemisphere countries?
    Medical reporting statistics, one and all.

  14. OldOzzie

    From Jo Nova

    Beware: the famous Flu death tally is “highly adjusted” and Coronavirus is still 10 times worse

    The annual Flu death tally is not what it seems

    It’s another bubble I don’t want to pop. Thanks for sticking in there in the quest for data that counts.

  15. egg_

    I have a piece in Quadrant where I estimate the person-years lives saved in Australia at 80,000. Each person-year is worth, on the government’s data, $219,000, hence saving is quantified at $17 billion.

    From previous IIRC the Concorde payout was USD$100k ea. after 10 years despite a class suit claiming USD$1M ea.
    Lost Time Injuries cost industry far more than deaths.

  16. egg_

    would it prefer to sail ahead with policy measures that don’t offend voters but ensure a broken economy?

    Since Hockey’s Budget, has it been any different?

  17. Ian of Brisbane

    Morrison never misses an opportunity to disappoint.

  18. min

    Agree Alan with the suggestions of what to cut to help with budget

  19. C.L.

    Do we have a government astute and bold enough to address such fundamental issues or would it prefer to sail ahead with policy measures that don’t offend voters but ensure a broken economy?

    We have a government that would it prefer to sail ahead with policy measures that don’t offend voters.

    Next question.

  20. John Bayley

    The Spectator piece adverts to some of the means by which the costs can be met.

    They forgot to mention the “Ctrl+P” option.
    That’s the most popular one, by far.
    MMT, here we come.
    Negative rates will be next.
    Westpac has predicted the RBNZ will roll those out before September, so no doubt at all our overpaid geniuses at the RBA won’t be far behind.

  21. Matt

    Of course Tim – which countries would you suggest?

  22. Matt

    Egg – likely a number of factors for this difference across countries – population dentistry, health system, age, prevalence of co-morbidities, measures to combat transmission.

  23. Bad Samaritan

    Matt (2.13pm) how about the following….

    Sicily (warm climate) about 45 per million deaths; 5.5 million pop.
    Arizona+ New Mexico; about 50 per million (warmer climate). 10 million pop
    Murcia (Spain) ; about 60 per million (warmer climate but not so warm as Sicily and Arizona / New Mex.)
    Greece: Hottest of all, but no Australia in Mar/Apr 14 per million 11 million population.

    All still much cooler than Oz, so therefore absolutely no chance of having a huge death toll in Oz. Being a hot island = no road or rail entries, so all that was needed was a quarantine of ship and plane arrivals…which govt stuffed up regardless. Also very obvious that confined spaces are killers in these colder places.

    Thus, the restrictions had very very very little to do with anything. heat is your friend when it comes to viruses in general.

    BTW: Is a Victorian abbatoir a cool place or a warm one?

  24. Infidel Tiger King

    Good thing we have locked up all our elderly and prevented them escaping north for the winter.

  25. Matt

    BS – no doubt that climate is a likely factor, but those countries all have mortality 10x or more greater than Australia. Also Iran, Brazil and other warmer climate areas have higher rates than Australia, so it’s not the only factor. I wouldnt rely on heat to protect me from this virus. Quarantine of international arrivals is clearly the biggest factor in keeping transmission low in Australia – notwithstanding the Ruby Princess debacle, we were shutting borders long before most of the rest of the world. But that has also had a significant impact on the economy too – higher ed, tourism etc.

  26. Pyrmonter

    I’ve recommended it before, but … interested Cats should monitor Marginal Revolution (link in the RH side panel) for links to the developing literature on what is happening and where we’re going. Some interesting stuff that rises above the culture battle of ‘you want to kill us all just for money’ v’s ‘you want to starve us all to save 99 year olds). SIR (Susceptible, Infected, Resolving) models are the flavour of the day, predictably enough leading to wildly divergent, but still interesting conclusions. The economists are, rightly, pointing out that behaviour adapts, and that ‘R’ is not the constant it would be if we were talking about a viral infection of a beehive.

    This from John Cochrane is also interesting: https://johnhcochrane.blogspot.com/2020/05/an-sir-model-with-behavior.html

  27. Infidel Tiger King

    Matt, we are a sparsely populated Island in the middle of nowhere.

    If you were designing a quarantine Island it would be Australia.

  28. Matt

    ITK – I think that’s exactly what the Poms had in mind a couple of hundred years ago

  29. egg_

    we are a sparsely populated Island in the middle of nowhere.

    Viz: NZ and WA.

  30. egg_

    you want to starve us all to save 99 year olds

    The apex of the risk pyramid is that the entity as a whole ceases to exist (viz: Concorde) = no Age Pension, oldies starve, regardless of the flu.

    Regarding Farr’s Law, only our Australian “curve” is relevant, and any hairbrained predictions are relevant to it.

  31. If you applied New York’s death rate to Australia as a worst case scenario (1323/m) we would have around 34,000 deaths. I think we can agree that NY is probably the worst example of mitigation implementation. e.g. Chinese New year?? – come on down to NY China Town and celebrate!
    The 34,000 scenario (based on actual worst case) is 1/3 the 100,00 mentioned as the initial Fear Factor driver for Australian restrictions.
    But the Gov now has set the moral bar at death numbers, not health system ICU/ventilator capacity.
    Good luck winding that back with a hungry media recording every single death on a daily basis.

  32. Squirrel

    Aside from an(other) income tax surcharge there’ll be land tax on the family home – which will compound the general misery and add to the inevitable foreclosures, but that’s a minor detail when you’re trying to pretend that the pre-virus scale and scope of government is going to be sustainable in a post-virus economy.

  33. flyingduk

    Each person-year is worth, on the government’s data, $219,000, hence saving is quantified at $17 billion

    .

    Well *theres* your problem! There is NO WAY even the average life in Oz is worth over 200 large PER YEAR!, and the ‘lives saved’ here are not ‘average’: if overseas experience is a guide the typical COVID death is an 80 year old man, with at least 1 if not 3 chronic diseases, and already in a nursing home. The net value of those lives is well in the negatives: they are major liabilities, not assets.

  34. WDYSIA

    The ABC reported today that Chinese companies are buying up water rights along the Murray-darling.

  35. Bad Samaritan

    egg (5.51pm). Don’t forget Taiwan, Singapore, Japan and, effectively Sth Korea (no road or rail entry) as islands. All very very low death rates per million while being cold places.

    I had a chat with my manager at Betfair two months ago about maybe getting some CV markets up and running. he chuckled but reckoned it was too “off”, though when we got onto “next British monarch” he knew immediately that that market (and various other political / novelty markets) involved factoring death (or deaths) into them (eg Charles is favoured, but the longer ERII goes on, the more chance William will be next.)

    I already have a rough “model” for CV death predictions , based on temperature, population density, GDP per capita, and ‘isolation”, which is not far wrong thus far. a bit of tweaking and it’d be good enough to make a “book” which would be how the bookies would do it too, I’d imagine.

    BTW: All “scientific” modelling fails because there’s no betting involved. With no skin in the game, what motivation would a tax-hoovering modeller have to actually get it right? A guy like Ferguson can say “at least 500,000 deaths” but the bookie would break it into bands “under 100,000; under 200,000….over 300,000, over 400,000 etc etc) so that those “believing” Ferguson could put their dough on the big numbers and lose their shirts!. Or not put it on= admit reality. The market knows.)

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