What we should all know about the U.S. debt ceiling.

 CAVEAT: I am not an economist. I am not an accountant. I am not a lawyer. I do read stuff and try to figure it out.

I've been watching with interest the "discussions" about the U.S. debt ceiling and the back and forth in the media about what alternatives both sides have. I realized that while I have a general idea about the U.S. debt and other financial matters, I don't really understand it in any depth. So I set myself the task of learning about things like the debt, tax revenue, budget deficits, etc.  I was inspired by a couple of columns by Paul Krugman in the NY Times a few days ago.(1, 2)

For me to start I thought I'd need to understand and define four different things:

1. The Gross Domestic Product (GDP)

2. The U.S. public debt

3. The annual U.S. government budget deficit, and

4. U.S. annual revenues.

Lets look at them from the bottom up. For the U.S. government (and any government, really) "revenue" is the total amount of money that the government collects from various sources during a fiscal year. 

A fiscal year is an accounting fiction that defines how much time you're going to count for revenues and expenditures. In the U.S. your personal fiscal year and mine runs from January 1 through December 31. For the U.S. government the fiscal year runs from October 1 through September 30 of the following calendar year. That's why all the government shutdown nonsense happens in the fall.

Each year the U.S. government collects revenue during its fiscal year. The vast majority of this government income is taxes that you, me, and all the businesses in the country pay to the federal government. Most of the other revenue is things like rents, and special fees, but they really just fall in the noise of total revenue. In fiscal year 2022, the U.S. government collected $4.9 TRILLION in revenue. Remember that this is for ONE FISCAL YEAR.(3)

Next, the budget deficit. A budget deficit occurs when the U.S. government spends more than it takes in in revenues. In fiscal 2022 the U.S. government spent $6.27 TRILLION, which is more than the $4.9 trillion taken in as revenue, resulting in a deficit of $1.38 trillion dollars. Where does that $1.38 trillion dollars come from? Well, the government borrows it by selling U.S. Treasury bonds.

A bond is a loan that the purchaser makes to the seller of the bond. In turn, the seller agrees to pay the purchaser interest on the value of the bond (usually at a fixed rate, and paid periodically through the year) and also agrees to eventually buy back the bond for the original face value.

When the U.S. Treasury issues bonds and sells them, the amount of the bonds sold is added to the U.S. public debt. (But see the "Deficits and debt" section of reference 11, because accountants are tricky.)

The U.S. public debt is the total amount of money that the U.S. government owes to everyone. Nearly all of the government debt is in the form of Treasury instruments (bonds of various sorts). At the end of 2022, the U.S. public debt was $30.824 TRILLION dollars. That seems like a lot, but we'll get to that. Note that the public debt is "the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history."(3) Notice three words here "total," "outstanding,", and "history." The public debt is the total amount of money that the U.S. government has borrowed over the last 247 years that it has not already paid back. 

Here's the interesting thing. THE UNITED STATES HAS ALWAYS HAD A PUBLIC DEBT. The Continental Congress borrowed money to pay for the American Revolution. Abraham Lincoln borrowed money to pay for the Civil War. The U.S. borrowed money to pay for World Wars I and II. The government borrowed money (to pay for the CARES act) to offset the economic effects of the COVID pandemic. Etc, etc, etc. We've ALWAYS HAD A DEBT. 

Sometimes the public debt goes up. During Ronald Reagan's presidency it more than doubled from $998 billion to $2.6 trillion. Sometimes it goes down. The last time the U.S public debt went down was when Bill Clinton had a budget surplus in 1999 and 2000. In "normal" years, the debt goes up by a little bit. For example, in 1996 the public debt was $5.225 trillion, in 1997 it was $5.413 trillon, a difference of $188 billion dollars. In abnormal years, it can go up by a lot. In 2019, the public debt was $22.719 trillion, but then COVID, and in 2020 the debt jumped to $27.748 trillion, an increase of $5.029 trillion dollars. During the recession of 2008-2010 (or so) the debt also went up quite a bit (about $4.5 trillion dollars) because the government was lowering taxes and increasing spending.(4)

Which brings us to the GDP, the Gross Domestic Product. According to the U.S. Bureau of Economic Analysis, the GDP "measures the value of the final goods and services produced in the United States (without double counting the intermediate goods and services used up to produce them). Changes in GDP are the most popular indicator of the nation's overall economic health." The definition of the GDP is a bit loose, because GDP is different depending on whether one includes inflation in the calculation, and whether it's "nominal" or "real", etc. I think the simple answer is that the GDP is the total value of goods and services produced by a country in a year, adjusted for inflation. It's a measure of the size of the economy of a country. 

Another important number is GDP growth year over year. In a healthy economy, the GDP grows a bit every year. "A bit" can be anywhere from 1.0% through 9 or 10%. In the U.S. historically our GDP has grown between about 2% and 6% per year. There is an international standard for how to compute GDP.

OK, so why is the GDP important? It seems to be important because the national banks and international banks (like the International Monetary Fund and the World Bank) use the ratio of a country's national public debt to it's GDP as a metric to see whether a country can continue to pay back it's public debt.(6) International bankers start to get worried when a country's debt/GDP ratio gets too much over 100%.

Currently the U.S. debt/GDP ratio is about 1.2, which is a decrease of it's high in 2020 of  1.34.(7) We can compare the U.S. debt/GDP ratio to other countries like the UK - 1.86, France - 1.16, Greece - 2.37 (bad), Brazil 0.86, and Canada 0.67.(8) 

The U.S. public debt has been going up slowly but surely since the 1980s. So, is that bad? Well, no. Because in that same time period, the GDP has also been going up. The U.S. economy runs deficits, but it's still growing, and - because of low interest rates - the fraction of the U.S. budget needed to "service the debt" has actually been going down in recent years.(9)

So the bottom line here is that at 1.20 debt/GDP ratio, the U.S. is not in any way in danger of defaulting on it's national debt.

Unless it just stops paying it. Which is where the debt ceiling kerfuffle comes in.

I won't try to explain all this (see reference 10) except to say the U.S. has an absolutely crazy way of creating budgets and getting the money to pay for expenditures. This crazy way has Congress voting spending bills (expenditures) which the executive branch is REQUIRED to execute. If the country buys something, it has to pay for it. But then, if the spending bills indicate that the government will run a deficit (spending > revenue) and if we've hit the maximum amount of money the country is allowed to borrow (the debt ceiling), Congress has to vote AGAIN to authorize the Treasury department to borrow money to pay bills the government has ALREADY PROMISED TO PAY.

If Congress doesn't do the second thing, the U.S. defaults on it's bills and the world economy goes to hell. The U.S. is one of exactly TWO countries that has this type of budgetary system (the other is Denmark, where they raise their debt ceiling every year with no fuss).

Except...... there's at least three things.

The first is section 4 of the 14th amendment to the U.S. Constitution which says: "The validity of the public debt of the United States, authorized by law, ..., shall not be questioned." which seems to say that the executive branch, which executes the laws that Congress passes, MUST pay the bills, no matter what, even if they have to borrow money to do it. (which means the 1917 debt ceiling law is likely unconstitutional because it stops the executive branch from borrowing)

The second is the Presidential oath, which says "I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States." which seems to say that the President is obligated to "faithfully execute the office," meaning the President (and the entire executive branch) is supposed to carry out the laws that Congress passes. This sets up a situation where the President has to decide which of two conflicting laws to obey.

Finally, there are other recent laws that require the executive to pay interest on the federal debt, make Social Security payments, and pay defense contractors that seem to be in direct conflict with the 1917 debt ceiling law, and again, sets up the President to have to decide which laws to obey.(12)

So, if the already passed spending bills say "spend this amount on that" and the debt ceiling law says "don't borrow more than this" they seem to be in conflict.(10) One of them should go, and it seems a sure bet it should be the debt ceiling.

REFERENCES

1. https://www.nytimes.com/2023/05/19/opinion/government-debt-pay-off.html

2. https://www.nytimes.com/2023/05/16/opinion/biden-debt-ceiling-republicans.html

3. https://fiscaldata.treasury.gov/americas-finance-guide/

4. https://www.thebalancemoney.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

5. https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/gross-domestic-product-GDP

and https://www.bea.gov/data/gdp/gross-domestic-product

and https://en.wikipedia.org/wiki/Gross_domestic_product

6. https://www.investopedia.com/terms/d/debtgdpratio.asp

7. https://fred.stlouisfed.org/series/GFDEGDQ188S

8. https://fred.stlouisfed.org/graph/?m=QzLa

9. https://fredblog.stlouisfed.org/2021/11/higher-public-debt-but-a-lower-cost-to-service-it/

10. https://www.cbpp.org/research/federal-budget/introduction-to-the-federal-budget-process

11. https://en.wikipedia.org/wiki/United_States_federal_budget

12. https://www.commondreams.org/opinion/biden-mccarthy-debt-limit-economic-terrorism

Reviews and Reviewers

 Reviews and Reviewers

I've written a book. It's my seventh book, so you'd think that I've got this down by now. However, for me, every book is a new adventure and requires new skills. All my books are non-fiction, so I've thankfully not had to learn to write dialogue. I've written two software development books, so, very technical. I've written three books on the history of cryptology, so, a mix of technical and story telling. I've done one book that was an edited collection of (other people's) short stories all related to cryptology in one way or another. 

All these books were different, and all were easy and difficult in different ways. I've used two different publishers, and both had different requirements for the manuscripts.

My latest book is a biography of three of the most important cryptologists of the first half of the twentieth century. So it's way different from any of the other six. The book started as the joint biography of two of these three people, William Friedman and Herbert Yardley, and most of my early research was into the lives and careers of these two men. But it didn't take long for me to realize that there was another person who just had to be in the book, William Friedman's wife, Elizebeth. Elizebeth Friedman was every bit as important to early twentieth century American crypto as her husband and very nearly as talented, so I just couldn't leave her out. Needless to say, adding Elizebeth to the book lengthened both my research time and, when I finally got around to it, my writing time. 

I'm probably one of the few people who (kind of) enjoyed the pandemic because, since I was cooped up in our house for the better part of a year and a half, I had lots of time to write. I finished the first draft of my new manuscript in mid-November 2021. I let it sit over the holidays and did a second draft in January 2022, after my wife had read and commented on the original. At that point I wrote up a book proposal, did some research on publishers, and picked a couple to send my proposal to. 

One of the publishers sent me a rejection within a couple of weeks. The acquisitions editor at the other publisher responded at about the same time and complained that the book was longer than what they usually published; including text, notes, and references my manuscript was about 170K words. Their maximum was usually about 100K words. Regardless, they asked for the complete manuscript to review. A publisher asking for the complete manuscript is a good sign because it means that the acquisitions editor likes your proposal and wants to see more.

In book publishing, you usually send a completed chapter or two to publishers along with your proposal. It's also OK to send queries to several publishers at once, as long as you tell them what you're doing. But, when you send a complete manuscript, you're pretty much obligated to wait until that publisher gives you a decision one way or another before you send out proposals to anyone else. I sent my complete manuscript along to the editor around the end of February. The acquisitions editor would then send my manuscript out to two or three reviewers that the publishing house contracts with to review the book. The reviews would be blind (I would not know who the reviewers were).

While I was waiting for the publisher's response I took a good hard look at my manuscript and did another draft, this time cutting out a lot of the text. By the end of March, the manuscript draft was down to 128K words for text, notes, and references. I felt pretty good.

Eighteen weeks (yes 18) after I first sent this publisher my manuscript I got a response from them. It was "Well, we kind of like your book, but we won't accept it until you make a ton of changes to it and we're happy with the changes. Take a look at the reviewers comments." This brings me to reviewers.

The acquisitions editor had enclosed two documents, the reports from each of the two reviewers to whom they had sent my complete manuscript. Remember, that the reviewers had my original 170K word manuscript.

Reviewer #1 wrote a detailed 10-page review of the manuscript. They gave an overview of their review and their top-level impressions. Overall, they thought it was a pretty good effort, "workmanlike" was one word used. Their top-level statements were pretty positive. But. They complained about the length, and said that the narrative was too taken up with technical details, duplicated some stories in places, spent too long on topics not directly related to the subjects, and strayed over and over again from what should be the main narrative about the three cryptologists. 

I had to agree. In fact, I'd removed some of those technical details in my first cut-and-slash editing of the manuscript, but there were other technical pieces and other stories that the reviewer thought could be improved, shortened, or just removed. Reviewer #1 then went on to go through the entire manuscript and made critiques and suggestions for improvements for each and every chapter. It turns out these comments and suggestions are a gem. In practically every set of chapter comments there are suggestions that will markedly improve the book. If I made these changes correctly, the book will be shorter, more focused, and in many other ways better. Clearly this reviewer took the time to think about what they were reading and made a real effort to give me positive, honest feedback. I am very grateful that this person reviewed my manuscript.

Reviewer #2's review of the manuscript was only half the length of Reviewer #1's. The acquisitions editor described the review as "harsh." I can not disagree with that. From Reviewer #2's comments it seems as if they have several basic, I may say visceral, disagreements with some of my opinions and thinking in the text about Friedman and Yardley. As opposed to Reviewer #1, who thought I had too much technical detail in the manuscript, Reviewer #2 dinged me for not having enough. There are a number of claims of various historical mistakes (some of which are accurate, some are not). The reviewer ends up suggesting I pretty much just throw away the entire manuscript and start afresh on a biography of just William Friedman. Friedman's only other biography was published in 1977 and most crypto historians agree that it is very flawed. But I'm not that interested in William Friedman. So, while Friedman probably does need a new biography, I'm not interested in being the person to do it. All that said, reviewer #2 did have a couple of suggestions that I will likely incorporate in my next draft of the manuscript. 

The bottom line here is that I was fascinated with both reviewer's comments. They really came at the job from two different perspectives and their reviews show that quite clearly. I've written enough papers, presentations, essays, and books to be pretty used to getting reviewed and to getting reviews that are pretty critical of my work. I like to think that I take critical reviews as opportunities for me to improve my work; they don't make me upset, and I hope they make me a better researcher and writer every time I produce a new manuscript.

I'll be moving on with a new draft of the manuscript, paying careful attention to both reviewer's comments and hoping that what I produce is better than the previous drafts. I'll likely send the new draft back to the original acquisitions editor and see if they are interested. If not, I'll move on to another publisher. Wish me luck.

UPDATE (Labor Day): This original post was written in mid-June, but I held onto it because I was still corresponding with the publisher. I set about making changes to the manuscript and by early August I had a new draft of about 125K words that incorporated nearly all the review suggestions. It really was a better book now but I thought the manuscript was really near the point that it was about as short as I could make it and still tell my story properly. I communicated with the publisher and sent them the latest complete draft the first week of August.

Crickets.

After two follow-up emails from me, I finally heard back from the acquisitions editor three and a half weeks later that the book was still too long and what was I going to do about it? 

I'm looking for another publisher.

It Turns Out I DO Have An Agenda

A few days ago I responded to one of those random surveys on Facebook. This one was something like "Cheapest gas you ever bought, where and when?" My response was "In 1969 in Houston I was paying 19.9 cents/gallon. (I’d rather pay $5/gal if it gets rid of fossil fuels.)"

A random person, whom I'll call Harry, took offense at my parenthetical remark and made a comment on my response. From Harry "...at the expense of those who have to choose between gas to get to work, or food on the table? Why do the less fortunate have to suffer for your agenda?"

Now, Harry knows nothing about me or my circumstances. The only thing he does know (I hope) is my snarky comment about getting rid of fossil fuels. Clearly he can't know if I have an "agenda" or not, but he was apparently willing to take the leap and assume I was an evil person who hopes that people who can't afford expensive gas will starve. I was offended. But as I thought about it more I realized that I DID have an agenda (although I also don't want to see people starve). 

Here's my agenda. I want my son and any possible grandchildren I may have to NOT have to live in a world that is rife with extremely destructive tornadoes, catastrophic hurricanes, constant heat waves, droughts, floods, sea-level rise, etc. That's my agenda. As far as I can tell, a side effect of my agenda is that the human race will need to wean itself off of burning fossil fuels for power as soon as possible. But, as Harry does correctly point out, there are many people who live at the edge of poverty for whom the elimination of fossil fuels - right now - will be a hardship. I get that.

I'm also only one person. My wife and I are retired. We're not rich, although we are able to live a comfortable middle-class life in a small town. We can't just throw a switch and eliminate all fossil fuels from our lives - it would be too expensive for us. So here's my plan - play the medium-term game. 

I write letters to my representatives at the state and local level encouraging them to address climate change as quickly as possible. I write to my senators, I write to the President. (Because, seriously, big changes in policies have to come from the top.) We donate what we can to a few conservationist not-for-profits, the Nature Conservancy, and the World Wildlife Fund, among others. We are also, as time and expenses permit, removing things from our lives that use fossil fuels.

I signed up for a program run through our electric company that for a small fee guarantees that all our electricity comes from renewable sources, notably wind and solar. Living in the Midwest, wind is plentiful here, and there are more and more solar farms being constructed.

My old lawnmower was due to be replaced, so this year I bought an electric lawnmower. I have to mow my lawn in two stages now, on consecutive days, but it gets me out of the house. I'm planning on selling the old lawn mower, which still probably has a couple of years left in it. I understand that whoever I sell it to will be using fossil fuel to run it. But hey, that person must need a lawn mower. I also have an electric chain saw, electric hedge trimmers, and an electric weed-whacker.

Our gas stove was also due to be replaced within the next couple of years (it's 20+ years old), so we replaced it with a new electric stove instead. We also replaced our existing microwave oven with a new, more efficient, model. The old gas stove and microwave are being recycled. 

While we were at it, we had the gas line in the kitchen capped, along with one in our laundry (we replaced a gas dryer with electric many years ago), and our gas fireplace. We'll replace the gas fireplace burner with an electric one this coming fall.

That leaves only two gas appliances in our house, our forced-air gas furnace, and our gas hot water heater. The furnace is about 22 years old and we'll replace it in the next few years with a heat pump. As I said, we're not rich, so we have to space out these replacements as we can afford them. We're hoping that the prices on air-source heat pumps come down a bit and that their efficiency goes up so we don't need an auxiliary source of heat when it gets really cold. 

We replaced our gas hot-water heater just about five years ago, so it still has at least five-to-ten years left in it. When it goes, we'll replace it with a tankless electric water heater, as long as prices on those have come down.

That would leave our automobile. When we retired we went down to just a single car. That car, an SUV with a four-cylinder engine, is five years old now. We usually keep our cars at least ten years and we had our last car for 17, so it will be a while before we'll think about replacing it. When we do, I'm hoping that fully plug-in electric cars will be considerably cheaper than they are now, that they will have longer ranges, and that the plug-in network will be ubiquitous.

In the category of "I'm not perfect and I have my limits" we still have a propane gas grill, which I love and which works marvelously. I use about one 15-lb can of propane a year. I'm not planning on replacing it any time soon. 

So that's my plan for implementing my agenda - being intentional about trying to do my part in helping us reduce our dependence on fossil fuels - and how we're going to do it over the next decade or so. I don't want to preach to anyone, and I don't want to harangue people to do exactly what my wife and I are doing. I think that climate change is real, that it is an imminent and important problem that we need to solve as quickly as possible. I also think that everyone needs to do whatever it is within their means to do to help mitigate the effects of climate change. I'm hoping that what my wife and I are able to do will help. 

Is the stock market really the economy, or not?

 I figured this would be a good topic for a post on the anniversary of Black Tuesday in 1929.

First things first: I am not an economist. Everything here is my own opinion and is based on the References at the bottom.

Question: Is the stock market really the economy?

Short answer: No it isn't.

Slightly longer answer: No it isn't - mostly, but the reasons are subtle.

Long answer:

About 52% of Americans own stock either directly because they own mutual funds or individual stocks, or because they invest in a 401(k), 403(b), or an IRA. That means that nearly half of Americans DO NOT OWN STOCK AT ALL IN ANY FORM. So for nearly half the country, market movements have no direct impact on them at all.

AND the richest 10% of Americans (measured by net worth and income) own 84% of the stock.

AND "(A) Federal Reserve study (using data from 2016) found that only about one-third of families in the lower half of the income scale had stock holdings. In the next 40% of the income scale, about 70% of households held stocks, while households in the top 10% of the income scale had stock ownership rates above 90%."

So the more money you have, the higher the probability that you own stock. 88% of households with earnings of $100,000 or more owned stock, while only 19% of those earning $35,000 or less did (and that mostly in retirement instruments). 

In addition, less than half of Americans are invested in retirement accounts and less than 20% of Americans work for companies that offer defined-benefit pensions. And most households who do own stock own less than $5,000 worth of it.

BUT, when the economy heads south, as it did during the spring of 2020, and even though the stock market did drop (34%) initially, the stock market can still rise, partly because it's viewed by wealthy people as a good place to stash money. With interest rates near zero, savings accounts, CDs and bonds are terrible places to make money this year. The stock market is a way better bet.

So, the bottom line here is that when the stock market goes up or down, it doesn't really directly affect many people. People might be affected if the market goes down and some companies lay off workers or go out of business. But in 2020 most of these layoffs are in small businesses that don't have any stock for people to buy anyway. People may also be affected if the market goes up a lot and some companies start to hire or raise salaries. But what really happens when the market goes up is that companies either buy back their own stock to increase the value of the company (by further increasing the price of the stock), or they send the money to their executives and shareholders in the form of bonuses and dividends.  None of which helps most people, even the people who work for these companies.

To emphasize this last point, from the Washington Post article cited below:

"In the middle part of the 20th century, for instance, stock market returns and wages rose more or less in tandem. But starting around 1980, the dynamic shifted: Corporations began to prioritize paying shareholders over paying workers. Stock returns took off, while wages stagnated.

The disconnect between the stock market and the job market is especially acute right now. Per the latest available data, the unemployment rate remains more than double its pre-pandemic level.

The S&P 500, on the other hand, is just 5 percent lower than its February high."

In short, nearly 20 million people who were employed in February 2020 are still unemployed 8 months after the first market slide and economic downturn despite the fact that the stock market has pretty much recovered that initial 34% slide.

So if there is any connection between the stock market and the economy it's a very weak one and it is advantageous to a very, small fraction of the population.

References (where I got my data):

On why the stock market isn't the economy:

https://www.nytimes.com/interactive/2018/02/08/business/stock-market-is-not-economy.html

and

https://tcf.org/content/commentary/stock-market-not-economy/?agreed=1

and

https://fivethirtyeight.com/features/the-economy-is-a-mess-so-why-isnt-the-stock-market/

and (a recent article)

https://www.washingtonpost.com/business/2020/10/27/401k-retirement-stocks-trump/

On the percentage of Americans who own stock:

https://www.forbes.com/sites/teresaghilarducci/2020/08/31/most-americans-dont-have-a-real-stake-in-the-stock-market/#223fe2661154

On the effect of stock market moves on Americans:

https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html

On the wealth of Americans:

https://www.nber.org/papers/w24085?utm_campaign=ntw&utm_medium=email&utm_source=ntw

And, just for grins, here's an economist that thinks the stock market is the economy - sort of:

https://www.marketwatch.com/story/why-you-should-stop-saying-stocks-are-not-the-economy-11598295686

COVID Mortality Rates (UPDATED)

 So I've been in a small kerfuffle with some folks on Facebook over the mortality rate of COVID-19. Their contention is that it is vanishingly small - like .002%. My contention is that it is much higher - like 5 - 6%. Since I've been told by some folks on FB to "do your own research," here it is.

---------------------------------------

Variables I use to compute the mortality rates:

Confirmed Cases: the reports of the total number of confirmed positive cases in the U.S.

Recovered: people who have a confirmed positive test and who have recovered from the virus (whether they were in the hospital, ICU, or not).

Deaths: well, yes. A confirmed positive case that leads to death. (Note that this can be tricky, since some death certificates which should read COVID-19 as the cause of death, instead read things like 'heart failure', pneumonia, etc. For example, my mother, who was a Type-1 diabetic, died of a heart attack. That's what's on her death certificate. But the heart attack was the proximate cause of her death. She really died from "complications due to Type-1 diabetes" which would have been a more accurate cause of death to put on the death certificate. The CDC and my other sources take these ambiguities into account when they produce death numbers.)

(Provisionally) Resolved: Since we're in the middle of a pandemic there are three types of COVID-19 patients. (1) those who've been confirmed positive, but whose cases have not yet resolved, (2) those who have recovered, and (3) those who have died from the disease. All three of these groups add up to the total number of confirmed cases.

Of those, the confirmed positive unresolved is the largest group; those are the people who have the virus but have not yet recovered or died. So we can't really count those people in a computation of the mortality rate because we don't know the outcome of their case yet. We can only count those whose cases have been "Resolved" in one way or the other. So we add those who've recovered to those who've died to get a single number of those whose COVID-19 cases have been resolved one way or the other.

This is why it takes the CDC several months to put out the annual report on seasonal influenza, how many cases, how many hospitalizations, and how many people died. To get a final number you have to wait until the number of new cases a week (or a day or a month) falls below a certain level, and all those confirmed cases have resolved before you can put out a final mortality rate for that year. For example, see the data for 2018-2019 here https://www.cdc.gov/flu/about/burden/2018-2019.html

So I use "Provisionally" Resolved because the number will change over time because we don't have the virus under control yet. This will cause the mortality rate to fluctuate.

Mortality Rate: MR = (Deaths/Resolved) it's the fraction of people whose COVID-19 cases have resolved and who have died from the disease.

=======================================

Here are the three sources of information I've been using in my research. I use them because they all have a history of doing this kind of analysis, they have been reliable in the past, and they are producing values that are pretty close together despite their being three separate organizations. Also, many other organizations (including the media) use their numbers when they report things to the public.

---------------------------------------

Centers for Disease Control - COVIDView

https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html

and scroll down to find "Severe Disease -> Mortality"

The CDC doesn't seem to report "Recovered" cases, just Deaths and Cases. (But if you can find a CDC website that does include Recovered numbers, please let me know.) So there's no way to compute the "Resolved Cases" number and hence the Mortality Rate. So we just have to take their word for it that this is the correct mortality rate for this week.

For week 38 (14 Sep 2020 through 20 Sep 2020) "the percentage of deaths attributed to pneumonia, influenza, or COVID-19 (PIC) for week 38 is 6.6% ... the percentage remains above the epidemic threshold and will likely increase as more death certificates are processed."

The CDC also lumps in pneumonia, influenza, and COVID-19 as reported on death certificates into a single number. Given that it's September, the influenza numbers should be very low. I can't say anything else more specific about this data.

---------------------------------------

Johns Hopkins Coronavirus Resource Center

https://coronavirus.jhu.edu/map.html

As of 25 Sep 2020 about 2:23PM

Confirmed Cases: 7,019,232

Recovered: 2,710,183

Deaths: 203,329

Resolved (Recovered+Deaths): 2,913,512

Mortality Rate (Deaths/Resolved): 6.97%

This is the website that most people in the media and other independent organizations go to to get their data. These folks are really good at what they do and I'd trust their numbers any day.

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Worldometers.info website 

https://www.worldometers.info/coronavirus/country/us/

as of 25 Sep 2020 at 20:48 GMT (3:48pm CDT)

Confirmed Cases: 7,220,658

Recovered: 4,463,721

Deaths: 208,081

Resolved (Recovered+Deaths): 4,671,802

Mortality Rate (Deaths/Resolved): 4.45%

The folks at Worldometer have been around for quite a while and do a very good job of gathering and validating data. They also use a wide variety of sources to get their data. The folks at Johns Hopkins use Worldometer to help validate their own data. I'm not sure why their Recovered number is so much higher than Johns Hopkins, so that's an opportunity to do some more research.

---------------------------------------

So as you can see, it looks like the mortality rate for COVID-19 is somewhere between 4% and 6%. Compare that to the mortality rate of the seasonal influenza virus which is about 0.2%. So the novel coronavirus is between 20 and 30 times more deadly than the seasonal influenza virus.

4% to 6% is a far cry from 0.002%.

Be careful out there and wear your masks!

=======================================

UPDATE: (And thanks to my friend Mike Murphy for providing the links used here.)

First, an article at the Our World In Data website titled "What do we know about the risk of dying from COVID-19?" by Hannah Ritchie and Max Roser, dated March 25, 2020 

Here's the link:

https://ourworldindata.org/covid-mortality-risk?fbclid=IwAR2DDpjV2N0BEDZC5zwDDrQ-fl2ieB65hvevzp_M-ZeqXqH55ACh9Y7A3UM

This is a good article that tries to define the different meanings of fatality rate from COVID-19 and clarify the definitions.

From that article I'll quote: 

"When some people are currently sick and will die of the disease, but have not died yet, the CFR (Case Fatality Rate = the number of deaths/number of confirmed cases) will underestimate the true risk of death. With COVID-19, there are many who are currently sick and will die, but have not yet died. Or, they may die from the disease but be listed as having died from something else.

In ongoing outbreaks, people who are currently sick will eventually die from the disease. This means that they are currently counted as a case, but will eventually be counted as a death too. This means the CFR right now is an underestimate of what it will be when the disease has run its course.

With the COVID-19 outbreak, it can take between two to eight weeks for people to go from first symptoms to death, according to data from early cases (we discuss this here).

This is not a problem once an outbreak has finished. Afterwards, the total number of deaths will be known, and we can use it to calculate the CFR. But during an outbreak, we need to be careful with how to interpret the CFR because the outcome (recovery or death) of a large number of cases is still unknown."

This definition is kind of the closest to my Resolved Cases definition above and makes the valid point that the fatality rate will change as the pandemic progresses and you won't know the final fatality rate until the pandemic is over (which I believe I said above).

Mike also provides another link from Johns Hopkins on Mortality Analyses: https://coronavirus.jhu.edu/data/mortality?fbclid=IwAR2oFYxbghmty3mGM56I2HYRc6QQtCqu9V6CbXiu5BPf6zYQLWFNJtVZOtg

The Johns Hopkins page gives several good graphs on, in particular, "case fatality ratios (the number of deaths divided by the number of confirmed cases)." 

Note that this is different from my fatality rate which is "the number of deaths divided by the number of RESOLVED cases." As noted above, I use RESOLVED cases because the pandemic is still ongoing and many of the current confirmed cases have not yet either recovered or died, so it doesn't make sense to me to include them in the denominator.

Finally, Mike shares a link from the research journal Nature, dated 28 August 2020, https://www.nature.com/articles/d41586-020-02483-2?fbclid=IwAR1r5WxYkOj8lm8qkOB7uvpgFiR3_X0IfArw2eCMR8vwBJE2Y1OR0BDtYqw

The article is titled "The coronavirus is most deadly if you are older and male — new data reveal the risks" and is by Smriti Mallapaty, who is the Asia-Pacific reporter for Nature News.

Mallapaty talks about a ratio "a metric known as the infection fatality ratio (IFR), which is the proportion of people infected with the virus, including those who didn’t get tested or show symptoms, who will die as a result." which is close to one described in the Our World in Data article described above. The main point of the article is that if you are male and/or over 50 your chances of dying from COVID-19 are way higher than if you're under 18. Something I think we've known for a while.

Aside from the definition of infection mortality ratio, this article really doesn't have much to do with the discussion in the original blog entry I wrote above, so we'll just leave that here.

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Please just listen to Dr. Fauci

So at 4:32PM CDT 2 September 2020 the numbers from https://www.worldometers.info/coronavirus/country/us for U.S. coronavirus cases & deaths are:

Confirmed Cases: 6,293,308
Deaths: 189,859
Recovered: 3,534,977

Now, if you divide Deaths by the sum of (Deaths + Recovered) you get
(189,859)/(3,724,836) = 0.0509
which is a 5.1% death rate. Not too bad, you say?
(BTW, the world death rate is just about 5% using numbers from the same source above. Also, we use (Deaths+Recovered) because we don't know the outcome of the rest of the positive cases yet. If we used Deaths/Confirmed Cases as Johns Hopkins University uses (see https://coronavirus.jhu.edu/data/mortality) then the death rate (what JHU calls the fatality ratio) is about 3%. This is still 15 times the fatality ratio of seasonal influenza.)

Let us look at the same numbers for the seasonal influenza virus. Many people (Mr. Trump included) have said that the novel coronavirus is no worse than the flu, so let's look.

From the official CDC web site at:
https://www.cdc.gov/flu/about/burden/2018-2019.html
(I used last flu season's data because all those numbers are complete and don't include any COVID-19 numbers.)

The case numbers and deaths from influenza are:
"CDC estimates that influenza was associated with more than 35.5 million illnesses, more than 16.5 million medical visits, 490,600 hospitalizations, and 34,200 deaths during the 2018–2019 influenza season. This burden was similar to the estimated burden during the 2012–2013 influenza season"

Unfortunately, the CDC doesn't tell us the Recovered cases, so we'll just use the medical visits as our denominator. So if you divide 34,200 deaths by 16.5 million medical visits you get
(34,200)/(16,500,000) = 0.00207
and rounding up, about 0.002
which is a death rate of 0.2%

So the COVID-19 death rate is about 25 TIMES the death rate of the seasonal influenza virus, at least in the United States. And we already have a vaccine for the influenza virus that millions of people take every year.

However, this doesn't say anything about how contagious COVID-19 is compared to the seasonal influenza virus. So lets look at that as well.

Here's a comparison of the novel coronavirus and the seasonal influenza virus from Johns Hopkins University. https://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus/coronavirus-disease-2019-vs-the-flu

With respect to which virus is more contagious, here's what the CDC says
"While COVID-19 and flu viruses are thought to spread in similar ways, COVID-19 is more contagious among certain populations and age groups than flu. Also, COVID-19 has been observed to have more superspreading events than flu. This means the virus that causes COVID-19 can quickly and easily spread to a lot of people and result in continuous spreading among people as time progresses."
https://www.cdc.gov/flu/symptoms/flu-vs-covid19.htm

So, yeah, don't wear that mask. You'll be fine.

But maybe you should wear that mask - SO YOU DON'T KILL ANYONE ELSE, like your parents, your child's teacher, your neighbor, the checker at the grocery store, your spouse.

Look, I know that masks are uncomfortable. I don't like wearing a mask whenever I'm out of the house either. I don't like social distancing. I don't like not being comfortable going to restaurants or movies, or the theatre. But think about it this way; you're not wearing the mask so that YOU don't get sick, you're wearing the mask so that OTHER PEOPLE don't get sick. Until we have a vaccine the only way to stop this virus outbreak is to STOP THE SPREAD and the best way to do that on an individual level is to wear masks in public.

So please, listen to Dr. Fauci and wear the damn mask.

One last thing; for a very good and readable article on the "5 Things Everyone Should Know about the Coronavirus Outbreak" take a look at https://www.yalemedicine.org/stories/2019-novel-coronavirus/

A Few Observations on Venturing Out During the Pandemic - 4 months in...

Observations today on coronavirus/quarantine/masks/venturing out into the world in Galesburg, IL.

BEWARE! I did my daily walk earlier today. Usually, I pass half a dozen or so people in my walk around the neighborhood; we stay on opposite sides of the street. Most don't wear masks - I don't wear one while I'm walking, but I've got it with me - but we don't get anywhere near each other. Today, though, I saw (1) a group of four older folks (at least as old as I am), 3 women and a man, walking together in a compact group, no masks, and no social distancing. Yes, they may all be living together, but... (2) Later I was passed by a group of five bicyclists, all adults, no helmets, no masks, all riding pretty close together so no social distancing there either.

So apparently this loosening up in Illinois is getting a bit out of hand.

MEDIUM GOOD NEWS: We also went to Hy-Vee on Henderson this morning during "senior hour". Many folks there still can't figure out the one-way arrows for the aisles. Nearly everyone in masks; I just noticed one person without one. This time all the employees were wearing them - and correctly (like covering their noses!). Folks were trying to social distance; the dots on the floor near the cash registers are terrific and people seem to adhere to them. Hy-Vee seems to be pretty much done with their wholesale "let's move every item to a different aisle" mania of the last few weeks, so that may have helped. There were still a remarkable number of gaps in the shelves where they are out of certain items. Luckily, we were able to get everything we needed.

GOOD NEWS: In the last two days I've had two appointments (don't ask, but it's OK) at the Illinois Eye Center in Peoria. Here are their criteria: (1) just the person with the appointment is allowed in the building (so Diane had to sit in the car), (2) temperature checks at the door, (3) all the employees in masks, (4) plexiglass shields at the check-in/check-out desks, (5) clearly marked social distancing signs and floor thingees, (6) all patients in masks, (7) hand sanitizer available in the halls and in every examination room, (8) folks following you through examination rooms wiping stuff down as you leave. I felt very confident and safe. 

Stay healthy, everyone!