Opinion | Will We Flunk Coronavirus Economics? - The New York Times - 0 views
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While a deep slump is unavoidable, however, good policies could do a lot to minimize the amount of hardship Americans experience. The problem is that the U.S. political landscape has long been dominated by an anti-government ideology that left us unprepared, intellectually and institutionally, for this crisis
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What should we be doing? Serious economists have already reached a rough consensus over the appropriate policy response to a pandemic.
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The immediate mission, beyond an all-out effort to contain the pandemic itself, should instead be disaster relief: generous aid to those suffering a sudden loss of income as a result of the economy’s lockdown.
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It’s true that we could suffer a second round of job losses if the victims of the lockdown slash spending on other goods and services. But adequate disaster relief would address this problem, too, helping to sustain demand.
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Second, decades of hostility to government have left us poorly positioned to deliver even the aid Congress has voted. State unemployment offices have been underfunded for a long time, and red states have deliberately made it hard to apply for benefits. So the surge in unemployment is overwhelming the benefits system; Congress may have voted disaster relief, but the money isn’t flowing.
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The loan program for small businesses is also, by all accounts, off to a shambolic start. And those $1,200 checks everyone is supposed to get? Many Americans won’t get them for weeks or months.
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It doesn’t have to be like this. Canada has already set up a special web portal and phone system to provide emergency unemployment benefits. Germans have been pleasantly surprised by how quickly aid is flowing to the self-employed and small businesses.
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But decades of conservative attacks on the idea that government can do anything good have left America with a unique case of learned helplessness. And this is combined with utter lack of leadership from the top.