MR: What is the proper fiscal response to the coronavirus?

https://marginalrevolution.com/marginalrevolution/2020/03/what-is-the-proper-fiscal-response-to-the-coronavirus.html

Questions an economist is pondering. I tend to agree with the point that there is too much we don’t know yet.

A question my wife and I discussed today: Should we disinfect the steering wheel of the car before getting in or before getting out?

I argued for before getting in, because then you know for sure it has been done. She argued for before getting out, because I might forget to do it.

10 thoughts on “MR: What is the proper fiscal response to the coronavirus?

  1. Tyler Cowen seems to hit on a lot of the issues with accuracy, in my view.

    There is not much to believe that actually putting more money into peoples pockets who are still employed will do much good.

    Regional targeting might seem a start, with extended unemployment benefits and healthcare subsidies for the lower incomes. Perhaps some form of temporary tax credits for small businesses.

    I don’t know what the status of talks in Washington DC is at now. But I sure hope we can avoid obvious and expensive relief to major industries such as oil.

    Airlines are very hard hit, but then they have been on a roll for several years now and should be able to weather a downturn.

    Tough one. I still think infrastructure spending would be a good one. At least workers are not jammed in side by side like a poultry factory. The problem is training, but we need that anyway.

    I do think that the hardest hit will be the middle and low income wage earners and self-employed in the service sector. The savings among them would be meager and many live literally paycheck to paycheck.

    Liked by 1 person

    1. Perhaps something along the lines of unemployment benefits for those who must stay home from work would be justified.

      But beyond that, government’s job is to save us from the disease, not make businesses financially whole. Loans to help businesses get by might be OK, but that’s about it.

      On the ?bright? side, Social Security and Medicare will likely become a lot more solvent.

      Like

          1. Yeah, sure, especially since I’m 71 with chronic asthma and thus one of those most likely to no longer be drawing benefits.

            Real dream come true,

            Like

  2. In answer to your steering wheel conundrum, I suggest both. Better safe then sorry.
    And don’t lick it either. Or rub your face on it. And to be truly safe, if you and the Mrs. are gonna get busy in the car, get in the backseat before starting the festivities. šŸ˜

    Like

  3. As the question remains, what is the proper fiscal move by the government, here is the Democrats plan in the House.

    https://thehill.com/policy/healthcare/487167-house-democrats-unveil-coronavirus-economic-response-package

    It appears to cover some of which we have already discussed here. (The only thing missing is subsidies for Buffalo sauce, as recommended by Don above.) And helps those who need it the most. The proposed payroll tax holiday makes no sense, especially for hourly workers. If they aren’t earning a paycheck, there is no holiday to be had.

    Not sure if this is the best plan, but it appears on its face to be one that addresses protections for people that are caught in a lose-lose situation as an hourly employee trying to support themselves and/or their families.

    If it passes the House, and it probably will (maybe even with GOP support), the Senate shouldn’t dawdle over it as it tends to do with MOST legislation the House sends over.

    Like

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