An Immediate Relief Plan for Coronavirus-Related Economic Mitigation

8 Pages Posted: 7 Apr 2020 Last revised: 9 Jun 2020

Date Written: March 10, 2020

Abstract

The Coronavirus crisis calls for an emergency supply-side and demand-side economic mobilization, financed using debt-free mechanisms as were used during the Great Depression and WWII, to prevent catastrophic economic collapse during the Coronavirus crisis. The plan calls for:

• Debt holiday covering all types of short-term debt and rental payments.

• $1,000 biweekly in universal income support, delivered through existing IRS/EITC mechanisms and direct deposits into bank accounts and digital wallets where necessary. (The $1,000/month proposals currently gaining support will still leave many families cutting spending and contributing to the negative demand spiral.)

• Direct support for small businesses, manufacturers and other sectors of the economy to prevent a wave of bankruptcies, protect against permanent destruction of productive capacity, and head-off any inflation concerns.

• Investment in building up stockpiles of needed goods and supplies.

• Temporary suspension of relevant tariffs and other trade impediments.

• Finance using emergency mechanisms such as negative rate Treasury issuance, Fed ‘helicopter money’ for taxpayers and government agencies, and/or ‘rollable’ Fed Discount Window lending to small businesses.

• Suspend requirement that Treasury issue new debt to finance operations.

Keywords: Coronavirus, COVID-19, Demand-Side Relief, Economic Mitigation, Mobilization, Supply-Side Relief

Suggested Citation

Hockett, Robert C., An Immediate Relief Plan for Coronavirus-Related Economic Mitigation (March 10, 2020). Cornell Legal Studies Research Paper No. 20-28, Available at SSRN: https://ssrn.com/abstract=3567855 or http://dx.doi.org/10.2139/ssrn.3567855

Robert C. Hockett (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

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