COVID 19 Business closures could cost the US $3-$5 trillion, Study finds.
The COVID-19 pandemic could result in net losses from $3.2 trillion and up to $4.8 trillion in U.S. Real Gross Domestic Product (GDP) over the course of two years, a new USC study finds.
1-Dec-2020 12:05 PM EST, by University of Southern California (USC)
Newswise — The COVID-19 pandemic could result in net losses from $3.2 trillion and up to $4.8 trillion in U.S. Real Gross Domestic Product (GDP) over the course of two years, a new USC study finds.
USC researchers project three scenarios that span from March 2020 through February 2022, accounting for hospitalizations, deaths and illnesses and their potential impact on the economy.
The pandemic’s economic impact depends on factors such as the duration and extent of the business closures, the gradual reopening process, infection rates and fatalities, avoiding public places, and pent-up consumer demand, according to the research by the USC Center for Risk and Economic Analysis of Terrorism Events (CREATE).
Real GDP is a measure, adjusted for inflation, that reflects the value and the quantity of final goods and services produced by a nation’s economy in a given year.
“In a best-case scenario, we would see containment measures, such as masks and social distancing become more widespread, and possibly even a vaccine by next year, and then businesses and institutions would be able to reopen at an accelerated pace,” said Adam Rose, study team leader who is the director of CREATE and a research professor at the USC Price School of Public Policy.
“But in a worst-case scenario, these countermeasures wouldn’t materialize, and reopenings would happen slowly, particularly because we would continue to see waves of infection,” he said. Then, more people would likely lose their jobs, and the impacts of this disaster would continue to mount.”
The researchers found that the mandatory closures and partial reopenings alone could result in a 22% loss of U.S. GDP in just one year and an even greater loss of GDP over two years. Other key factors, though, will influence how disastrous the losses may be, they noted.
The research team noted that China has not sustained such losses due to aggressive containment measures resulting in a shorter lockdown period. They project that in a worst-case scenario, the U.S. GDP loss due to COVID will more than quadruple that of China.
The study was published on Nov. 30 in the journal Economics of Disasters and Climate Change.
In early March, several states responded to a rise in COVID-19 cases by ordering the closures of non-essential businesses such as restaurants, bars, salons and retail stores. Many also halted or reduced public services to limit the spread.
Researchers at CREATE who are experts on modeling economic consequences of disasters analyzed the potential economic impact in three scenarios ranging from moderate to disastrous.
Using a computerized economic model, the researchers accounted for these other factors in the three scenarios. They varied the decline in the workforce due to workers becoming sick with or dying of the virus, workers adopting new behaviors like staying home to avoid infection, increased demand for COVID healthcare, potential resilience through telework, increased demand for communication services, and increased pent-up consumer demand.
The researchers conducted a synthesis of the literature of projections on the severity and possible duration of the pandemic. For the scenarios, which span from March 2020 through February 2022, this compilation of findings indicated that the number of COVID-related deaths in the United States could range from more than 300,000 to, in a worst-case scenario, 1.75 million.
Anywhere from 365,000 to as many as 2.5 million COVID patients could end up in the ICU, while another 860,000 to nearly 6 million patients may be hospitalized but not treated in the ICU. The projected number of people who will be treated for COVID as outpatients may vary from about 2.6 million to 18 million.
Among other highlights of the study, the researchers projected:
- 54 million to 367 million work days would be lost due to people getting sick or die from COVID
- 2 million to nearly 15 million work days would be lost due to employees staying home to care for sick loved ones.
- Job losses could range from 14.7% to 23.8%, and in the worst case affect an estimated 36.5 million workers.
- Demand for health care has risen with COVID infections. Medical expenses due to COVID-19 from March 2020 to February 2022 could range from nearly $32 billion to $216 billion.
- A loss in demand for some services — such as the use of public transit and school attendance, restaurant dining and travel — as people avoid public places and services to reduce their risk of exposure.
- An uptick in demand for communication services, as many employees during this pandemic have had to work from home.
An increase in pent-up demand will arise since consumers are unable to spend money on big-ticket items such as cars, as well as on travel, restaurants, hotels, merchandise, fitness, sporting events and concerts during the closures, and, to a lesser extent, during the phased reopenings.
While the researchers have found that the mandatory closures and re-openings are the most influential factor in the economy’s decline, consumer avoidance behavior also has a significant effect.
For the study, the researchers assumed that various people avoided work, did not attend in-person classes at schools, and stopped going to restaurants, activities and social gatherings to reduce their risk of infection.
“Because people have had to avoid activities, this has had a significant impact on economic losses,” said Dan Wei, a CREATE research fellow and research associate professor at the USC Price School for Public Policy. “Based on our model, we estimate that avoidance behavior can result in nearly $900 billion losses in U.S. GDP in the worst-case scenario. Because consumers in places like California can’t engage in many activities like eating inside a restaurant, they are saving their money.”
The economic losses from closures and avoidance behavior could be partly offset by increased consumer spending after reopening, the researchers said.
“Pent-up demand is one of the most influential factors for the economy in this pandemic. While the mandatory closures and partial reopenings drive most of the economic decline, the extent to which pent-up demand leads to an increase in consumption after reopening, can be crucial to the economic recovery,” said Terrie Walmsley, a USC CREATE research fellow and an adjunct assistant professor of practice in economics at the USC Dornsife College of Letters, Arts and Sciences.
“The key question is: When will we see a complete reopening across this country? We simply cannot predict that, especially in light of the fact that we have not gained control of the spread of the disease,” Rose said.
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The work was supported by a U.S. Department of Homeland Security Center for Accelerating Operational Efficiency (CAOE) research contract.
USC CREATE, which is affiliated with the USC Price School for Public Policy and the USC Viterbi School of Engineering, was the first of several research centers in various academic disciplines that the U.S. Department of Homeland Security helped establish in the wake of the terrorist attacks on Sept. 11, 2001.
RED OAK, Texas — It was standing room only, overflow rooms packed, and tempers running high. Yet after hours of objections from residents, a divided Red Oak City Council voted around midnight to approve a massive data center project, leaving many citizens convinced their elected officials had already made up their minds long before the first speaker approached the podium.
The May 11 meeting drew such a crowd that even reporters struggled to get inside. According to Fox 4 News, the council chamber seats 136 people, and at least 70 additional residents had to wait outside or gather in a separate room because of capacity limits. The issue before the council was a proposal to rezone more than 800 acres of farmland for what would become another large data center development. Residents packed the meeting to oppose it. By multiple accounts, no organized speakers appeared in support of the project.
According to Fox 4, city leaders allotted one hour for supporters and one hour for opponents to speak. Residents later complained that the process appeared tilted against citizens because there were virtually no supporters present, while opponents continued lining up to address the council.
The proposal ultimately involved rezoning approximately 830 acres and included a tax abatement package approved by a 4 to 1 vote. Fox 4 reported the council entered executive session for nearly an hour before returning shortly before midnight to cast the decisive vote. Residents who remained said they were willing to stay until 2 a.m. if necessary.
Mayor Mark Stanfill and council members Willie Franklin Jr., Ricardo Miller, and Tim Lightfoot formed the majority approving the measure. Councilman Jeffrey Smith cast the lone dissenting vote. Critics say the four officials effectively ignored overwhelming public opposition and pressed ahead anyway.
Residents repeatedly raised concerns about noise, electrical demand, water consumption, and the location of the facility near schools. City officials argued the project would not use city water for cooling and emphasized the economic benefits and tax revenue expected from the development.
Those assurances did little to calm residents.
“How many of these data centers are next to your house, Mr. Mayor? How many are on the east side of town?” resident Martel Edwards asked during the meeting.
Kim Sterman expressed concern about children attending nearby schools.
“We don’t know what’s going to happen to the children who are going to be going to schools,” Sterman said. “All of our schools over there, the high school and the junior high are going to be pretty close to this new patent board facility. Y’all don’t know what’s going to happen.“
Residents also complained that city officials threatened individuals displaying anti-data center signs on their property, allegations reported separately by local media and discussed by residents during and after the controversy. Those claims could not be independently verified by Pipkins Reports.
The battle in Red Oak reflects a growing national trend. Data centers are essential to modern computing and artificial intelligence systems. But communities across Texas and the country have increasingly questioned the rapid expansion of these facilities.
Critics point to concerns over electricity demand, environmental impacts, noise, and the industrialization of previously rural land. Some studies and utility reports have warned that rising AI related power consumption could place additional stress on electric grids and contribute to higher costs for consumers.
Residents expressed frustration that another major project was being approved despite widespread opposition. Some expressed that the process to replace the Mayor and other City Council members, began last night and that the action they have taken regarding the Data Center has sealed their fate.
Sources: Red Oak YouTube; Fox 4 News; City of Red Oak records;
Texas — In the rough and tumble world of modern politics, it seems nearly everything has become a partisan battlefield. Yet amid the endless political shouting, one alliance continues to produce tangible results for working Texans: the economic partnership between the United States and Israel.
While national headlines often focus on military cooperation or foreign policy disputes, a quieter story has been unfolding across Texas. Israeli companies have invested billions of dollars in the Lone Star State, bringing manufacturing, technology, defense innovation, and thousands of jobs along with them.
According to data reported by state and industry sources, Israeli businesses have invested approximately $3.2 billion in Texas over the past decade, supporting more than 4,200 jobs. Those investments stretch from Fort Worth’s defense sector to Austin’s growing energy technology industry. For many Texans, the U.S., Israel relationship is not an abstract diplomatic concept. It is a paycheck, a career opportunity, or a growing local economy.
One of the most visible examples is Elbit Systems of America, the U.S. subsidiary of Israeli defense technology giant Elbit Systems. Headquartered in Fort Worth, the company develops advanced defense, aviation, homeland security, and electronic systems used by American military forces and government agencies. Luke Savoie is President and CEO-elect. The company reports more than 3,300 employees nationwide and maintains its corporate headquarters in Texas.
The Fort Worth operation has become a significant contributor to the local economy. Company officials have previously reported employing hundreds of Texans at multiple facilities in the region while supporting a broader network of suppliers and contractors throughout the state.
The company’s work also illustrates how the relationship functions in practice. Israeli research and development capabilities are combined with American manufacturing, engineering, and workforce talent. The result is technology that supports U.S. military readiness while generating jobs and investment at home.
That model has expanded beyond defense. Another Israeli company, SolarEdge Technologies, has established a major manufacturing presence in Austin through its partnership with Flex. In June 2025, the company announced that its Austin facility had produced its 250,000th solar inverter, a milestone that drew recognition from Governor Greg Abbott. The company stated that the operation has created more than 1,000 high quality jobs in Texas.
Solar inverters are a critical component of renewable energy systems, converting electricity generated by solar panels into usable power. SolarEdge officials say the Austin facility supports domestic manufacturing while helping strengthen American energy infrastructure. The company has also expanded exports of products manufactured in the United States to international markets.
SolarEdge Chief Executive Officer Shuki Nir recently emphasized the importance of American manufacturing, stating that exporting U.S. manufactured products demonstrates the company’s commitment to meeting demand for American made quality, reliability, and innovation around the world.
These investments have received support from Texas leaders across the political spectrum. Governor Abbott has repeatedly promoted economic ties with Israel, highlighting the state’s growing role as a destination for Israeli technology, energy, and defense companies. The governor’s office formally recognized SolarEdge’s Austin manufacturing milestone in 2025, citing its contributions to job creation and domestic production.
The economic relationship reflects a broader pattern. Texas has long attracted foreign investment because of its business friendly climate, skilled workforce, and strategic location. Israeli firms, known globally for innovation in defense, cybersecurity, energy, and technology sectors, have increasingly viewed Texas as a natural partner. The combination has proven profitable for both sides. Israeli companies gain access to American markets and talent, while Texas communities receive investment, jobs, and expanded industrial capacity.
Disclosure: Pipkins Reports is not affiliated with Elbit Systems of America or SolarEdge Technologies. No compensation or other consideration was received from either company for the writing or publication of this article.
Google Co-Founder Heads to Florida
Sacramento, CA. – A seismic shift in California’s economic landscape is quietly underway as lawmakers and union backers push a controversial billionaire wealth tax. What was pitched as a modest 5 percent levy on the ultra-wealthy has exposed more serious threats to innovation and property rights — and it has already driven one of the state’s most famous founders out of California. Google co-founder Larry Page has relocated to Florida, driven in part by provisions in the tax that could assess billions of dollars on unrealized gains tied to super-voting Class B stock.
The proposal — officially titled the 2026 Billionaire Tax Act — would impose a one-time 5 percent charge on the net worth of individuals whose worldwide assets exceed $1 billion as of January 1, 2026. Supporters frame it as a targeted revenue source for healthcare, food assistance, and education, critics warn the tax’s mechanics could reshape American capital formation.
What the Proposal Actually Does
Under the initiative, wealth is defined as total global net worth, including publicly traded stocks, private business interests, intellectual property, and other assets — excluding most real estate and certain retirement accounts. Rather than taxing only realized income, the tax includes unrealized gains in asset value. That means founders may owe tax on increases in stock value they have never sold.
The language of the proposal goes a step further: it treats voting power as though it were equivalent to economic ownership for founders with dual-class stock structures. In Silicon Valley, it is common for founders to hold Class B super-voting shares that confer control with far less economic interest than voting interest. Under the initiative’s valuation rules, a founder with 3 percent of a company’s economic shares but 30 percent voting control could be treated, for tax purposes, as owning 30 percent of the company — multiplying their taxable wealth many times over.
Economists have pointed out that this “voting power equals ownership” assumption effectively taxes phantom wealth — value that exists on paper but is not proportionate to actual economic ownership. The result: tax bills far greater than a simple 5 percent of net worth might suggest, particularly for founders of tech companies structured around dual-class stock.
Exodus of Billionaires Begins
The reaction among California’s wealthy has been dramatic. Larry Page, whose super-voting Class B shares give him outsized control at Alphabet, has purchased multiple high-value properties in Florida and moved many business entities out of California. His relocation comes amid widespread concerns that the wealth tax could penalize founders disproportionately based on voting shares rather than actual economic stake.
Venture capitalist Peter Thiel has also publicly mobilized against the tax, donating millions to efforts to defeat it and shifting aspects of his business operations to Miami. Other tech leaders and investors are reconsidering their California footprint, with some establishing offices or residences in states like Texas or Florida.
Economic and Legal Concerns
Economists and legal scholars caution that enforcing a tax on unrealized gains is inherently complex. Valuing privately held assets and dual-class stock structures invites disputes and litigation. The retroactive assessment based on residency at a fixed date could expose residents to significant tax bills even if they had intended to leave the state before the tax was implemented.
Critics also argue that using voting power as a proxy for economic value could violate constitutional protections against uncompensated takings, as it effectively treats control rights — not purely economic interest — as taxable property. Legal challenges are almost certain if the measure qualifies for the ballot and is approved by voters.
Political Clash
Supporters, including union leaders and some progressive advocates, say the tax would help fill budget gaps in healthcare and social services created by federal spending cuts. They maintain that the ultra-wealthy have benefited disproportionately from California’s economy and should contribute more.
Governor Gavin Newsom (D), has distanced himself from the proposal, warning that it threatens investment and could accelerate capital flight. Business groups such as the California Chamber of Commerce and the California Business Roundtable have echoed those warnings, describing the tax as a “dangerous wealth tax” that could harm the state’s competitiveness.
Broader Implications
California’s billionaire tax debate has quickly transcended local politics to become a national test case. If approved by voters in November 2026, it could encourage similar initiatives elsewhere, particularly in high-tax states. At the same time, the backlash has highlighted the risks of taxing unrealized gains — a feature that economists and tax policy experts say is untested and could disrupt capital formation.
For states like Texas and Florida, which champion low taxes and economic freedom, California’s experiment presents both a contrast and an opportunity. As capital and executives reassess their domiciles, the business climate and economic growth of states without such wealth taxes may benefit.
Larry Page’s move to Florida is not just a personal choice. It is a symbolic indicator of where capital flows in response to policy. Once talent and wealth leave, they seldom return. California’s experiment in wealth taxation should give pause not only to its voters but to every state considering similar schemes.
Sources:
Tax Foundation, “The Proposed California Wealth Tax Is Far Higher than 5 Percent,” January 2026.
California Attorney General Initiative Text, “2026 Billionaire Tax Act.”
Business Insider, “Larry Page Continues His California Exile with Florida Property Purchases,” January 2026.
Yahoo Finance, “Peter Thiel’s $3 Million Donation to Defeat California Wealth Tax,” January 2026.
WebProNews, “Dual-Class Voting Share Valuation Sparks Silicon Valley Outrage,” January 2026.