Quick Saturday thread, stepping back from all the whirlwind developments of this week and trying to make sense of a fundamental tension right now in Washington (and the country) on COVID-19 response. 1/
The tension really boils down to: How many people should the federal government be paying to stay home for the next several weeks, who otherwise would be working? 2/
A large group of public health experts and economists basically say "as many as possible". Reducing gatherings -- including job site gatherings -- appears to be key to reducing spread of the virus. So you tell people who can work from home to do so, the argument goes... 3/
...and then you pay people who can't work from home (like retail clerks and restaurant wait staff) to stay home.
The idea is, the economy is headed for recession anyway -- so we should basically put as much of it as poss into deep freeze, funded with borrowed federal $$. 4/
The idea is, the economy is headed for recession anyway -- so we should basically put as much of it as poss into deep freeze, funded with borrowed federal $$. 4/
You see the problem here, though: We can't shut the whole economy down. People need food & health care, in particular, so some ppl will need to keep working to ensure it (and other necessities) are available. The ? is, where do you draw the line? Who needs to stay at work? 5/
A corollary to that question is, how do we protect businesses from failing if activity slows down? Especially small businesses with low margins? 6/
The House bill that passed last night answers that question. It draws the line pretty far from "shut down as much as possible". It offers paid sick leave, but only to ppl directly affected by the virus -- not all potential carriers, which is to say, everyone. 7/
It also exempts potentially ~20 million workers -- those at firms w less than 50 workers or more than 500, who do not currently have sick pay, per BLS -- from the benefit. 8/
So the economists like @SHamiltonian who are yelling "shut everything down!" see the bill as a good start, but nowhere near sufficient.
He would like to see much more direct $$ support for workers and biz, to bridge the lull and rebound fast. (Like Australia is doing.) 9/
He would like to see much more direct $$ support for workers and biz, to bridge the lull and rebound fast. (Like Australia is doing.) 9/
@SHamiltonian But it all fits together. Business owners are rightly worried that shutting everything down could kill their businesses for good. Some lawmakers worry the line will be drawn too far and there won't be a functioning economy of necessities. 10/
@SHamiltonian And what complicates everything is the fact that even today, you have people who are still minimizing the threat of the disease -- the "not as bad as the flu" crowd. If you think the virus is just a big scare tactic, you obviously aren't going to support a shutdown response 11/
So that's where we are. Washington is responding much more aggressively than a week ago. Millions of Americans are now in line to get paid to stay home. But as the virus spreads, and closings and cancellations grow, so will pressure for a bigger response... 12/
Which would be more stimulus, more direct $$ to workers (incl self-employed ppl who won't get the sick leave benefit) and biz. We're not there yet. We'll see where we are next week. Both parties say there will be another response bill after this one. /fin
Coda: "Shut it down" is starting to look like the norm in Europe: washingtonpost.com/world/2020/03/…
