The next package
The federal government’s chaotic national response to the coronavirus has delivered an economic challenge the likes of which the nation has not seen since the Great Depression.
No longer is there a question of whether there will be another massive coronavirus-related federal rescue package. The question is how much.
Before Congress appropriates another dollar for small-business relief it must correct mistakes. Step one is to shutter the loopholes that allowed publicly traded companies to vacuum up large amounts of the relief funds, and then more efficiently target small neighborhood business and proprietorships that have fallen through the cracks. One possible solution is to funnel more money to community-based lenders and midsized banks.
Step two is to make sure that states have the dollars and facilities to conduct far more extensive coronavirus testing. The success or failure of state efforts to ease stay-at-home restrictions depends on whether the states, including Texas, are able to test more people and analyze the results quickly.
Step three is to make sure that the nation’s food supply is secure. We’ve seen farmers destroying crops that are no longer profitable, long lines at food banks and illness-related shutdowns of meatpacking plants. New strategies are needed to address weaknesses in the nation’s food supply chain.
Step four is for the federal government to have serious talks about whether new laws are needed to mitigate coronavirus-related lawsuits as businesses attempt to reopen.
Make no mistake, reckless behavior should be punished. However, the uniqueness of this situation warrants a discussion of the complex, legal liability issues, including whether certain businesses should have special legal protections.
Finally, the nation must be more honest about the economic toll that fighting the coronavirus will have on future generations. Together, the Federal Reserve and Congress have tossed about $9 trillion into the fight without an end in sight. And these numbers don’t take into account the dollars that state and local governments are spending.
That’s a huge amount of money with a predictable outcome—a financial anvil on future generations. This is a steep price that the nation will pay. Much of the spending is necessary, but it’s also incumbent on Congress to be prudent as it advances. A dollar spent today is one that will have to be paid back by future taxpayers, so while it’s important to deal with the crisis before us, it’s also important not to create a future crisis for the country.