The question of whether people not working during this crisis should have income support delivered through UI or payrolls
has little to do with the collapse of small and medium businesses. That collapse is driven by fixed costs and a fall in expectations of future income. 1/
has little to do with the collapse of small and medium businesses. That collapse is driven by fixed costs and a fall in expectations of future income. 1/
True that PPP and payroll proposals have some funding earmarked for fixed costs, like rent. But those are completely insufficient by themselves.
We must extend income replacement, with triggers, for unemployed workers. But that won't answer the small/medium business question. /2
We must extend income replacement, with triggers, for unemployed workers. But that won't answer the small/medium business question. /2
Without endorsing, here's one approach from @ModeledBehavior. Note how he's talking about fixed costs with liquidity and future income with solvency. This plan isn't about worker income replacement; we already know how to do that, and it is different. eig.org/news/main-stre…
This is absolutely doable. Japan has done both corporate QE and zero-interest loans without collateral to small businesses.
Instead of spending 2010s goofing with targets and guidance, they learned how to turn monetary into fiscal. We can catch up. /fin japantimes.co.jp/news/2020/03/0…
Instead of spending 2010s goofing with targets and guidance, they learned how to turn monetary into fiscal. We can catch up. /fin japantimes.co.jp/news/2020/03/0…
