One Seemingly Subtle But Huge Benefit That Could Come from Having Lived Through a Pandemic

Folks do a terrible job of projecting anything exponential. I wrote a post early last year about how stupid it was that officials were recommending such dramatic action in response to COVID when it had affected so few. Friends smarter than me politely corrected me and when I computed the numbers, I was reformed. 

We don't have good intuition for things that grow exponentially.

Last year at this time we hadn't heard of COVID. It may kill 500,000 Americans. Exponential growth is huge.

The good news is that exponential numbers work to our favor as well. Assuming we manage the rollout effectively and actually vaccinate people at the rate justified, the spread of immunity through our community (particularly for our most vulnerable) will eventually cause as dramatic a drop in the rate of infections and death as the rise we saw last year.

I'm vulnerable to bouts of wild optimism. One weird bit of optimism I have about post-pandemic life? Having been immersed in the effects of rapid compounding of growth, we will get more serious about investments that bump GDP growth by 1/4% to 2% per year, knowing that the affect on the incomes of the next generation will be huge.

Given current income, a difference of half a percentage point in growth rates means a difference of $10,000 in median income in a generation; a difference of 1.5% would mean a difference of $35,000.

A difference of half a percent compounded over a generation sounds trivial. And maybe the average voter will always treat it as such. But if the exponential spread of a pandemic leaves us with a keener sense of the cumulative effect of small, compounding changes it would be huge. I mean, once compounded over time.