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The economic impact of the coronavirus

Yahoo Finance's Rick Newman joins Myles Udland to discuss the toll the novel coronavirus will have on the U.S. economy.

Video Transcript

MYLES UDLAND: Let's bring in Rick Newman now, Rick, for a conversation of the cost of this virus. And you're kind of coming at it from a different angle than just the cost of the stimulus.

RICK NEWMAN: Yeah. I'm researching this question of, is there any logic to the idea that maybe you should tolerate some additional increase in infections and deaths to get the economy going again? And there's actually a lot of research on this type of question. So in the regulatory world, they have something called the statistical value of human life.

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And the statistical value of one human life is $10 million. And this is, you know, among regulatory agencies. This is just widely accepted. So if you just use that as a measuring tool, and you say, well, what's the economic stake if we are able to prevent 100,000 deaths or 200,000 deaths? And it's, frankly, it's huge.

So for every 100,000 deaths in the United States, you're able to prevent that is $1 trillion in human capital or economic value that you're preserving. So if you look at the estimates, so Dr. Fauci's optimistic estimate is we might end up with a total of 100,000 deaths. And if you look at the worst case estimate, which is if we did nothing, we'd have 2 million.

So you're talking about potentially saving almost 2 million lives there. So in a statistical basis, that is $20 trillion of human capital or economic value. That tells you it's worth shutting down the economy for a while to save lives. And if just for comparison, that whole stimulus bill that was such a big deal, that was only $2.2 trillion dollars or 1/10 of the economic value we might preserve according to this type of analysis.

MYLES UDLAND: Well, and I think it gets to the point that Jay Powell, among others have made, which is that there's no point in talking about the economic consequences of this if you can't get a handle on the public health part of it because you can't have the former without healthy citizens. And so there's really nothing to talk about economically until we make sure have a handle on this disease and we save as many lives as possible.