Based on deficit levels the US government took on during World War II, we believe we have room to enact $3.2 trillion in fiscal stimulus — more than triple the current Treasury proposal.
I would take three key steps as part of a historic $3.2 trillion stimulus to combat economic fallout from the coronavirus pandemic:
Send people money
The federal government should, as soon as possible, send $3,000 to every adult and $1,500 to every child to cover basic living expenses for the next three months. The estimated total cost would be around $900 billion.
The government would fill in revenue shortfalls across all industries, rather than conduct selective bailouts, with the requirement that companies receiving aid agree not to lay off any workers and to suspend dividends for three years and share buybacks indefinitely. For contract workers, the program would act like unemployment insurance. Universal paid sick leave would be guaranteed by the federal government. Interest-free credit lines would be made available to address short-term liquidity issues.
This is the most straightforward way to avoid mass job losses, prevent huge holes from forming in state fiscal budgets and allow companies to quickly resume the normal course of business when the virus abates.
These economic measures should be taken in concert with an expanded federal public health response, including a 30-day nationwide shutdown to flatten the curve of infection, free drive-thru coronavirus testing centers, temporary hospital facilities and the federal purchase or manufacture of respirators and ventilators for all those who need them.
The economic recovery from the global financial crisis was slow by historical standards due to the fact we undershot the size of fiscal stimulus in 2009. Let’s not make the same mistake again. With the right solutions, we can come through this crisis stronger and more united than we entered it.