Overview:

The COVID-19 Outbreak in Burnie Tasmania shows the process of COVID-19 outbreak, the impacts of government policy on both the COVID-19 outbreak and the GDP growth in Burnie.

Assumptions:

We set some variables at fix rates, including the immunity loss rate, recovery rate, death rate, infection rate and case impact rate, as they usually depend on the individual health conditions and social activities.

It should be noticed that we set the rate of recovery, which is 0.7, is higher than that of immunity loss rate, which is 0.5, so, the number of susceptible could be reduced over time.

Adjustments: (please compare the numbers at week 52)

Step 1: Set all the variables at minimum values and simulate

results: Number of Infected – 135; Recovered – 218; Cases – 597; Death – 18,175; GDP – 10,879.

Step 2: Increase the variables of Health Policy, Quarantine, and Travel Restriction to 0.03, others keep the same as step 1, and simulate

results: Number of Infected – 166 (up); Recovered – 249 (up); Cases – 554 (down); Death – 18,077 (down); GDP – 824 (down).

So, the increase of health policy, quarantine and travel restriction will help increase recovery, decrease confirmed cases, decrease death, but also decrease GDP.

Step 3: Increase the variables of Testing Rate to 0.4, others keep the same as step 2, and simulate

results: Number of Infected – 152 (down); Recovered – 243 (down); Cases – 1022 (up); Death – 17,625 (down); GDP – 824 (same).

So, the increase of testing rate will help to increase the confirmed cases.

Step 4: Change GDP Growth Rate to 0.14, Tourism Growth Rate to 0.02, others keep the same as step 3, and simulate

results: Number of Infected – 152 (same); Recovered – 243 (same); Cases – 1022 (same); Death – 17,625 (same); GDP – 6,632 (up).

So, the increase of GDP growth rate and tourism growth rate will helps to improve the GDP in Burnie.

Government Spending at a certain point leads to spending in excess of tax receipts. This will automatically lead to the issue of treasuries in the belief that the excess spending must be financed by borrowing (although the government has the capacity to create  money). This in turn will increase the national debt.

 Consequences that follow from this practice:

1) That national debt increases whenever the government spends in excess of tax receipts.

2) That the government must pay interest on the debt issued, which in turn increases and reinforces the need for government spending.

3) That the interest paid on treasuries will increase private sector income.

There is an alternative view, supported by Modern Monetary Theory, of how government spending can proceed. Please see this  Insight: 

https://insightmaker.com/insight/19954