I've been asked many times in the past few days how to think about the various economic policy options in response to corona. In this short thread, I'll lay out the main ones and my take. I won't talk about speed of implementation because on that I think we all have no idea. 1/6
*Uniform stimulus checks*. The problem is the economy won't move the money where it is needed (business and poor). To give everyone the same check that would cover the worst off, the package would be $5tn. You could claw some back in '21, but not all would see it that way. 2/6
*UI expansion*. The UI system will be crippled under a 1000-fold increase in load. And this relies on workers detaching from firms, and does nothing to keep firms open. This will prolong and deepen the recession. Better to keep firms alive and workers attached to firms. 3/6
*Business loans*. The revenue drop will be so big that even with loans firms will be insolvent. So a large number of firms will pull the pin. Lost jobs, workers onto UI, long and painful recovery. Also the burden is uneven. Society needs to share the burden via subsidies. 4/6
*Subsidised business loans contingent on maintaining workers*. This is @stanveuger's and my plan. Keeps firms alive. Workers attached to firms. Takes load off UI. Designed to prevent gaming and capture by business owners. Businesses can spin up quickly again after the crisis. 5/6
We designed our plan to solve the problems with the other options. It's workable. It costs maybe $1.5tn, but it solves lots of problems. A link to the plan is below. I'd be happy to discuss it at any time with policymakers or journalists. Please RT! 6/6
steven-hamilton.com/s/How_to_Help_…
steven-hamilton.com/s/How_to_Help_…
