Monday, March 16, 2020

Covid-19 Helicopter Money: Go Big Now or Go Home

This is why it's imperative to go big now, and make plans to sustain the most vulnerable households and small employers not for two weeks but for six months--or however long proves necessary.
That governments around the world will be forced to distribute "helicopter money" to keep their people fed and housed and their economies from imploding is already a given. Closing all non-essential businesses and gatherings will crimp the livelihood of millions of households and small businesses that lack the financial resources to survive weeks without any revenues.
The only question is whether governments which can borrow or print fresh currency will get ahead of the implosion or fall behind, creating a binary choice: go big now or go home.
Half-measures in helicopter money work about as well as half-measures in quarantine, i.e. they fail to achieve the intended objectives. Dribbling out modest low-interest loans is a half-measure, as is cutting payroll taxes. Neither measure will help employees or small businesses whose income has fallen below the minimum needed to pay essential bills: rent, food, utilities, etc.
Meanwhile, the ruling elites will be under increasing pressure to bail out greedy financial elites and gamblers--the same scoundrels and parasites they bailed out in 2008-09. But this is not just another speculative bubble-pop, this is a matter of life and death and solvency for the masses of at-risk households and small businesses. It is a different zeitgeist and a different crisis, and bailing out greedy parasites (banks, indebted corporations, speculators, financiers, etc.) will not go over big while households and small businesses are going bankrupt.
The Federal Reserve, was just handed a lesson in the ineffectiveness of the usual monetary "bazooka" in bailing out the predatory-parasitic class of overleveraged gamblers. Nearly free money for financiers isn't going to save the economy or non-elites sliding toward insolvency.
Instead of leaving the bottom 99.5% to twist in the wind while enriching the predatory-parasitic class, the ruling elites will have to let the top 0.5% twist in the wind and save the bottom 99.5%. This will require going against all the thousands of lobbyists, all the chums at the club, and all the millions in campaign contributions, but it's a binary choice.
Either save your citizenry or sacrifice your legitimacy by bailing out the predatory-parasitic class. If the ruling elites save their parasitic pals, the public will demand the scalps of the predatory-parasitic class, and as the crisis deepens, they will eject every craven, greedy elected toady who caved in to the predatory-parasitic class.
So listen up ruling elites: either go big or go home. Either accept that it's going to take several trillion dollars in helicopter money to insure the most vulnerable households and real-world enterprises remain solvent, or quit and go home.
The pandemic crisis isn't going to end in April or May, though the urge to indulge in such magical thinking is powerful. It might still be expanding in August and September.
This is why it's imperative to go big now, and make plans to sustain the most vulnerable households and small employers not for two weeks but for six months--or however long proves necessary.
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


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