An Rx to calm America’s coronavirus panic
The US is now in the throes of the novel coronavirus scare, and panic has ensued.
To stabilize the economy, we have to act now. The ideas in the Pelosi-Mnuchin bill are a start, but we need to go full-throttle.
Deficits are of no importance when saving lives and rescuing the economy from pandemic fallout are the priorities. To do the right thing, it will take between $3 trillion and $4 trillion, much of which will be paid back. My suggestions follow.
Direct stimulus: Each household should receive a check for $2,000 and an additional $500 per child.
Payroll tax holiday: A payroll tax cut on the corporate side will free up cash during this temporary slump and help prevent layoffs — and it’s also a big plus for the gig worker. In addition, it will increase take-home pay.
Delay tax filing: The IRS deadline should be postponed by at least 60 days.
Bail out airlines and small energy: After 9/11, when planes couldn’t fly, we helped the airlines and we need to help them again, this time with Troubled Asset Relief Program capital injections. Small Energy needs this, too, so jobs aren’t lost due to Russian and Saudi saboteurs.
Low-rate SBA loans: Small Business Administration loans need to be covenant-lite for businesses with fewer than 50 workers.
Paid sick leave: Government should assist companies to continue to pay employees who are sick, quarantined or unable to work due to shutdowns.
Expand government debt: Float new, large, ultra-long-term bonds of up to 30 to 50 years. Rates are at all-time lows, so capital should be freed up for this crisis and the unexpected.
Federal Reserve action: The Fed needs to say it “is prepared to do whatever it takes” to recover, including coordinated intervention with Japan, the EU, the UK, Australia, etc.
Map of coronavirus cases in the US
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