My three scene run-of-show of the economic crisis:
Scene 1:VIRUS ECONOMICS
Here the most important thing you can do for the economy is slow the virus or show it has a lower bound. Pay sick not to work, buy ventilators, test/isolate. Nothing works until you get a handle on this.
Scene 1:VIRUS ECONOMICS
Here the most important thing you can do for the economy is slow the virus or show it has a lower bound. Pay sick not to work, buy ventilators, test/isolate. Nothing works until you get a handle on this.
Scene 2: PREVENT FOREVER DAMAGE FROM NOW PROBLEMS
Even if it rebounds soon, many businesses & ppl will not be able to survive the shock. Extensions on loans, food stamps, bankruptcy/foreclosure moratoria, money to stave off permanent collapse is key here.
Even if it rebounds soon, many businesses & ppl will not be able to survive the shock. Extensions on loans, food stamps, bankruptcy/foreclosure moratoria, money to stave off permanent collapse is key here.
Scene 3: STIMULUS
Only AFTER 1 and 2 can you effectively get ppl spending again. Personally I favor cutting sales taxes here because it incentivizes actual spending rather than more savings if people remain fearful after virus wanes but any good bang-for-buck stuff here works.
Only AFTER 1 and 2 can you effectively get ppl spending again. Personally I favor cutting sales taxes here because it incentivizes actual spending rather than more savings if people remain fearful after virus wanes but any good bang-for-buck stuff here works.
But there’s danger in trying 3 before 1 or 2: if govt spends $500b and nothing happens but rich people get another tax cut, no one will agree to any further stimulus again.
And there’s good hay to be made in using #1 as stimulus—govt program to 3x ventilators, rent out entire hotels for 6 mos for care centers, whatever. Do the WWII mobilization type stuff applied to health. It ramps down fear can help move us quicker to scenes 2 and 3.
As in financial crisis, you can do anything until you stop the bank runs. Here the runs are ordinary people withdrawing from the economy. You have to address the health side before they will come back.
Fixing the typo
As in financial crisis, you can’t do anything until you stop the bank runs. Here the runs are ordinary people withdrawing from the economy. You have to address the health side before they will come back.
So examples of this ‘forebearance’ style that govt can do right away: extend payment dates for various types of tax and fee payments, change procurement cycle to pay all govt bills immediately, no foreclosures, gas shut offs, evictions for x months, etc
