Here is one finance professor's take on the smart way to help businesses and workers struggling under the coronavirus pandemic:
With major cities locked down, all travel canceled, and the global supply chain disrupted, the U.S. economy is likely to experience the largest contraction since the Great Depression. The policy question, then, is not whether the government should intervene, but how.
Besides facilitating compliance with the restrictions, this policy would have two added benefits: 1) it will reduce the financial uncertainty that workers face, containing the surge in precautionary savings, which will compress demand; 2) it will ensure that production capability will remain in place, so that supply can resume as the pandemic subsides.
Read:J.P. Morgan economist’s advice to Congress: Don’t send checks — let the banks quickly compensate businesses so they’ll hang on to workers So if a small restaurant that last year made $100,000 in profits is experiencing a 90% drop in revenues, it would receive a check from the IRS of $18,900 . The same logic would apply for the personal income of all self-employed.
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