> No we didn't (collectively shit ourselves)

Agree to disagree on that one :)

> and we did not really heed the lesson that SARS-CoV-1 gave us

Agreed.

> I take it that your term "externalities" (I haven't heard it before) is referring to the side effects eg economic of our attempts to deal with it.

Exactly, see https://en.wikipedia.org/wiki/Externality#Negative. Just keep in mind that the economy is not some abstract notion, but rather is you and me and everyone else. In other words, economic damage isn't something that just hurts rich shareholders, it hurts everyone because there's less wealth.

Suspension of elective surgeries, which happened all over the country here in the US, is one of the best examples of such externalities that were caused by panic and bad policy rather than reality. For example, here in California we suspended all elective surgeries for a month. But we never were close to being overrun, and given that the vast majority of these surgeries are out-patient, there was never a need to pre-emptively cancel them. Lastly remember "elective surgery" sounds a lot like "non-essential work" but basically any pre-scheduled surgery is elective: organ transplants, hip replacements, arthroscopic labral repair (I'm waiting on that one currently), etc.

> Until you know (test, test, test again) that you have actually had the disease then I suspect you will be always looking over your shoulder.

That's why the strategy I advocate for does not rely on the availability of testing capacity, because the goal is not to practice indefinite containment.

If you've decided that you want 80% of society to behave as normal and gradually become infected and recover, then PCR testing loses a lot of its utility. It's mostly useful for clinical diagnostic reasons, to get a loose handle on spread, and finally to use as validation for other tests like serological tests.

> There are many reports of additional snags post infection eg renal problems and lung damage, not to mention the mental trauma.

These post-infection snags are quite rare, based off the evidence I've reviewed. Personally I have observed that so many advocating for lockdown make references to the supposed widespread organ failure, strokes in young people, etc, and the evidence just does not support those claims. These outcomes do happen but they are incredibly rare and given that they are logical results of inflammatory cascades (cytokine storm for example), we see the same outcomes in disease like Influenza that we are not losing our collective shit about.

> not to mention the mental trauma.

I believe the mental trauma caused by the wide-spread panic and fear-mongering is vastly worse than the mental trauma of recovering from COVID-19.

25-50% of people that get COVID-19 are entirely asymptomatic or are paucisymptomatic.

For many, it's like getting the flu.

And for some - significant numbers, but not as many as we're led to believe - it is a horrendous disease that results in invasive ventilation followed by likely death.

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Not quite mental trauma, but fear of going to the hospital has led to people who actually have COVID-19 to avoid getting treatment because they don't realize they have COVID-19 (yet are experiencing serious adverse conditions):

From https://www.nejm.org/doi/full/10.1056/NEJMc2009787?query=rec...:

"Social distancing, isolation, and reluctance to present to the hospital may contribute to poor outcomes. Two patients in our series delayed calling an ambulance because they were concerned about going to a hospital during the pandemic."

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Now onto real mental trauma:

https://www.thelancet.com/journals/lanpsy/article/PIIS2215-0...

* "Third, the COVID-19 epidemic has caused a parallel epidemic of fear, anxiety, and depression. People with mental health conditions could be more substantially influenced by the emotional responses brought on by the COVID-19 epidemic, resulting in relapses or worsening of an already existing mental health condition because of high susceptibility to stress compared with the general population."

* "Finally, many people with mental health disorders attend regular outpatient visits for evaluations and prescriptions. However, nationwide regulations on travel and quarantine have resulted in these regular visits becoming more difficult and impractical to attend.

And my favorite, a case study of COVID-19 related paranoid delusions in a schizophrenic:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7162758/

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Sorry for the massive wall of text.