The government is expected to write checks to Americans to help them through the coronavirus crisis. The remedy is not good enough, writes Andrew Ross Sorkin in the New York Times. In his op-ed, he floats a far more intensive solution, but one he says is the only way to stem the financial panic:
- "The government could offer every American business, large and small, and every self-employed—and gig—worker a no-interest 'bridge loan' guaranteed for the duration of the crisis to be paid back over a 5-year period," he writes. "The only condition of the loan to businesses would be that companies continue to employ at least 90% of their work force at the same wage that they did before the crisis."
Expensive? Most definitely. If the crisis lasts 3 months, as much as $10 trillion in loans could go out under this scenario, he writes. If, say, 20% was never paid back, American taxpayers would be out hundreds of billions of dollars, possibly more. "But with interest rates at near zero, there is no better time to borrow against the fundamental strength of the US economy, spend the money and prevent years of economic damage that would ultimately be far, far costlier," argues Sorkin. The current options under consideration might end up being worse because they're too small too work, he adds. A benefit of this one is that it "would immediately create a sense of confidence and relief during these tumultuous times." Read the full column, in which Sorkin suggests that the loans should be administered by banks but guaranteed by the government. (Read more coronavirus stories.)