With a cost that’s well below its peers, you’d think the AstraZeneca/Oxford vaccine would see plenty of demand. However, that’s not a given, following the release of late-stage VE data…
— from an article by Sean Williams on TheFool.com, December 16, 2020
According to certain internet sources, the creators of the original TV show, Star Trek, didn’t have enough money in their production budget to build and film a small landing craft to transport the Enterprise crew from the mother ship to the surface of as-yet-unexplored planets… so the script writers came up with a clever, low-budget alternative: a “Transporter Room” that de-materialized and instantly “beamed” crew members to remote locations, where they would re-materialize and save yet another civilization from destruction, on behalf of the UFP (United Federation of Planets).
A limited budget can cause people to become creative. Glue a few used laser discs to the floor, stretch some plastic shower curtains across the back wall, and you can be transported anywhere, instantly.
But how about, if money is no object?
Acting “of, by and for” the people of America, the US government appears to have almost unlimited borrowing capacity — and tentatively promised to purchase millions of first and second doses of COVID vaccines during 2021. Pfizer/BioNTech is reportedly charging us $19.50 per dose (so then, $39 for the two-dose treatment.) The Moderna vaccine appears to cost about $35 per dose (or about $70 for the two-dose treatment.) We can add, to those costs, the expense of transporting and administering the vaccines, while keeping them at extremely cold temperatures.
The AstraZeneca/Oxford vaccine, currently being administered in the UK, has been approved for use in Argentina, El Salvador, India, Mexico, Bangladesh and the Dominican Republic. AstraZeneca has made the decision to supply its vaccine at cost (i.e., without generating a profit). priced at about $4 per dose. It appears to be effective with a single dose, and and can be stored at normal refrigerator temperatures.
Someone will pay for these vaccines. But who? The information I’ve come across, so far, has failed to address that particular question.
Meanwhile, the rollout of the vaccine has been disorganized mess, with shortages reported all over the US. Recently promoted ideas include adminsitering ‘half doses’… and making people wait 12 weeks for their second dose… two ideas that currently have no scientific data to support them. Another bottleneck appears to be a lack of personnel to administer the vaccines. (Locally, writer Cynda Green reported her upbeat experience getting her first dose of the vaccine in Friday’s Daily Post.)
It seems that he Trump administration decided against spending money to ensure a larger supply of vaccines would be available. The New York Times reported the Trump administration declined repeated offers from Pfizer to lock in hundreds of millions of additional vaccines for Americans, and Pfizer board member and former Food and Drug Administration chief Scott Gottlieb confirmed the story.
From The New York Times, December 11, 2020:
Before Pfizer’s coronavirus vaccine was proved highly successful in clinical trials [in November], the company offered the Trump administration the chance to lock in supplies beyond the 100 million doses the pharmaceutical maker agreed to sell the government as part of a $1.95 billion deal months ago. But the administration, according to people familiar with the talks, never made the deal, a choice that now raises questions about whether the United States allowed other countries to take its place in line.
The government was in July given the option to request 100 million to 500 million additional doses. But despite repeated warnings from Pfizer officials that demand could vastly outstrip supply and amid urges to pre-order more doses, the Trump administration turned down the offer, according to several people familiar with the discussions.
Perhaps the Trump administration didn’t order more doses… because they simply didn’t have the money?
Between 2008 and 2020 — that is to say, between the start of the Great Recession, and the start of the New Great Depression — the US government borrowed a ton of money, trying to keep the whole house of cards from collapsing. One report states that the federal debt reached $27 trillion this past October. In 2008, federal debt equaled about 36% of our Gross Domestic Product (GDP). By the end of the second quarter of 2020, it had hit 105%. (According to the Federal Reserve Banks.)
Curiously enough, the Chinese are the second largest foreign holders of US Treasury notes — holding about $1.1 trillion, just a bit behind the Japanese, who hold about $1.3 trillion. These foreign investments are relatively minor in the larger scheme of things, however. Most of our federal debt has actually been borrowed, by the US Congress and President, from the Federal Reserve Bank ($10 trillion), private banks and other investors… and from federal trust funds — money that theoretically belongs to you and me — namely, Social Security, Medicare, and federal retirement funds.
If you add the debt ‘held’ by Social Security and all the retirement and pension funds, almost half of the US Treasury debt is owed to trust funds belonging to current and future retirees. If the United States were to default on its massive debt, foreign investors would be sorely disappointed, but US retirees would likely be hurt the most. (Some people think a “trust fund” has something to do with “trust”. Apparently not.)
With all that in mind, we note that President-elect Joe Biden rolled out a $1.9 trillion federal ‘rescue package’ on Thursday, aimed at helping individuals, businesses, and local governments weather the economic shock of the COVID pandemic. Presumably, we will also weather the shock of $29 trillion in federal debt at some point in the future.
Mr. Biden’s proposal incorporates an array of relief provisions that congressional Democrats had included in past proposals, such as a $1,400 boost to stimulus checks, $400-per-week federal unemployment benefits, a major expansion of the child-tax credit, assistance to state and local governments, and a $15 minimum wage. It also would boost funding for COVID vaccinations by $20 billion, and for coronavirus testing by $50 billion.
Introducing the proposal, Mr. Biden stated the obvious. “The price tag will be high.”
“The overwhelming consensus among leading economists left, right and center is that in order to keep the economy from collapsing this year — getting much, much worse — we should be investing significant amounts of money right now…”
That would be, however, significant amounts of money that we don’t have.
As I understand the production of a TV show like Star Trek, the actors didn’t actually get transported anywhere when they stepped into the Transporter Room. The whole thing was done with a camera trick that made the actors seem to disappear into thin air.
In the case of the federal government, the trick is to make money appear out of thin air.
And maybe, to make vaccine doses also appear out of nowhere?