Homeland Security Watch

News and analysis of critical issues in homeland security

December 8, 2005

CBO on the economic costs of the pandemic flu

Filed under: Biosecurity — by Christian Beckner on December 8, 2005

The non-partisan Congressional Budget Office released a new report today entitled, “A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues.” (Direct link to PDF here).

The analysis puts forward two outbreak scenarios: “mild” and “severe.” In the severe scenario, they forecast a reduction in GDP of 5% in the year of the pandemic; in the mild scenario, 1.5% of GDP. In other words, the United States is looking at a potential $200-$600 billion hit to national GDP from an avian flu outbreak. This makes the $8 billion that the administration is proposing to spend to protect against this threat seem like a reasonable hedge, so long as the money is spent appropriately and in a timely manner.

Update: AP story here on the report.

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