How should macroeconomic policy respond to COVID-19? Twitter has hosted a lively debate in recent days. In this chart, I’ve tried to distill that discussion into three basic strategies: (1/5) 
First, some immediate decline in economic activity is necessary to combat the virus. We want risky activities to stop. We know GDP is not a measure of social wellbeing. That’s especially true today. Policy should not try to fill that hole. (2/5)
Second, we want our productive capacity to rebound once the virus risk recedes. COVID-19 shouldn’t destroy otherwise healthy businesses, nonprofits, etc. As just one example, that’s why the UK is now offering business interruption loans. (3/5)
Third, we want to make full use of our productive capacity once the virus risk recedes. Fear, uncertainty, and job loss could stifle demand. That’s why we see proposals to distribute cash, cut payroll taxes, etc. (4/5)
Expanding safety net programs (e.g., unemployment insurance, paid sick leave, and Medicaid) would also support demand. But those policies can often be justified on health and social insurance grounds before even considering their macroeconomic effects. (5/5)
