Yes we can have COVID-19 bailouts without the backlash, here’s how
Once again, America is faced with a crisis that is coaxing almost all of us to demand economic stimulus and bailouts.
But we’d only be adding to the tragedy of the coronavirus effect on the country if we fail to learn the lessons from what worked and didn’t work from our responses to the 9/11 attacks and the Great Recession.
Make no mistake, we’re going to need stimulus and bailouts of some kind again. But here are some better ways to go about them to make sure they have the most positive economic, psychological, and even political impact.
Bang for the Bailout Bucks
Not every industry in line for a possible bailout is really able to contribute something in return, but some are able to do so right away. The big U.S. airlines, which are almost universally hated by American consumers, would be wise to jump at any opportunity in this situation
The airlines could go a long way to reducing America’s pent up animosity against them by using their idled jets to bring supplies and medical teams to the hardest hit areas. They could also just pick up the slack by taking on the added cargo flights overburdened companies like Amazon and UPS might be unable to make because of the added online shipping demand.
Hotels can step up to earn some of that federal help by offering to house medical or National Guard teams, or converting some of their spaces for quarantine or triage centers. That’s something a major hotel chain in Israel is already doing. Restaurants can obviously pitch in by helping to feed patients, medical workers, and military personnel.
Where the bars fit into this “pay back equation” is not as clear, but maybe they just donate their refrigerators or storage space for perishable and other supplies.
If ever there was a time to get creative, this is it.
Delay, Delay, Delay
No matter how much money people like Senator Mitt Romney want to send us all, it’s being put in the context of keeping consumer spending afloat. But that won’t do much for millions of Americans who may suddenly have trouble keeping their homes and/or the lights on while they lose their income in this coronavirus shutdown.
Because of taxes, especially property taxes, the federal, state, and local governments act as the ultimate bill collector in America. That means if they all work to indefinitely delay tax collection deadlines, the pressure on landlords, tenants, small businesses, etc. is greatly relieved.
The heavily state-regulated utilities should also suspend bill collections and hold off on shutting off power and water. Unlike other natural disasters, these companies are not overburdened with having to restore their own infrastructure right now. This is the time for them to be asked to step up.
Universal Basic Income in Perspective
While it’s not a bad idea to go ahead with plans to send each U.S. citizen $1,000 as Senator Romney has suggested, this only goes to show why we shouldn’t make this a regular thing.
We should see now that these kinds of payments should be reserved for just this kind of emergency for several reasons. Chief among them is to make sure there’s enough money to make those payments when they’re most needed.
But when the government sends cash to people in these kinds of emergencies, it’s so much more psychologically effective than when it gives out money to people just for existing. Programs that focus on improving the job market and reminding Americans that they have something to contribute to the economy are essential. Otherwise, we not only risk crowding out help for the truly poor, but we telegraph a message that too many Americans are helpless without government handouts.
In this special time of crisis, we don’t risk devaluing Americans simply by sending them cash. We’re just helping them.
Bailouts, tax rebates,etc. have all been tried in the recent past with mixed success. They’ve also often come along with enduring political resentment. But now we have a chance to bring the nation together in a great give-and-take, public/private effort to beat back the economic devastation of COVID-19.
Let’s get this done.
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