Thread by @ddayen

More important than living in the "take the deal" past is what can happen between now and February to mitigate the damage. There are a few options:

1- It's beyond clear that the Fed needs to dispense with its reticence and use Section 14(2) authority to distribute short-term, endlessly rolled-over debt to cities and states prospect.org/coronavirus/un…

2- A Biden transition can use a kind of "forward guidance" to detail explicitly what relief will be passed ASAP in the new Congress & create certainty. They should lean on banks to advance short-term, 0-interest advances on individual relief. Long shot but worth a try.

3- a top priority is wiping away all credit events from early March to the present. Should be jawboning the credit bureaus to do this voluntarily, with an eye to codifying later.

If the recovery is dependent on flush banks granting working capital to revived small businesses, their credit events during the pandemic should absolutely not be a factor.

That's not much but as I've said, we have a winter of our discontent coming.
prospect.org/politics/winte…