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Why are we seriously overestimating Covid19 death rate?

Instead of measuring Covid-related deaths as a proportion of the infected population, we are measuring it as an average percentage of people who got diagnosed, the demographic that is skewed towards much older age.

The death rate for folks under 40 is incredibly small, vs. those over 70 where the rate is high.

If we want to get over this pandemic, it would be ideal if we could figure out how to let the population in danger to remain isolated, while everyone could go on with life as usual.