economics
coronavirus
Should the Economy Be Placed into “Hibernation” Until the Lockdowns End?
Israeli Knesset (2010-2013)
Economist
0
0
Genesis
Response
Penultimate
Finale
April 6th, 2020
I agree that there will be significant distributional effects from the virus. However, I would stay away from a rhetorical framing suggesting that this is an issue of exploitation or loss of freedom.
I know some very well-off people who are losing their jobs, in sports marketing for example. And there are many people who are not so well off who are landlords and depend on rental payments to be able to meet mortgage obligations and have income on which to live.
Even if the government were not directing people's behavior in any way, fear of the virus would devastate certain sectors, such as cruise lines and international travel and tourism. We cannot say that the government is the cause of layoffs in those sectors.
As fears of the virus ease, some sectors will come back quickly, while others will come back slowly, and others may never come back. Other businesses will actually benefit from shifts in how people choose to live. I believe that the market process will manage this evolutionary process about as well as it can be managed.
When it all settles out, we will find that some people who were not very well off even before the virus crisis were hurt further by the social distancing measures. It would be appropriate to raise taxes temporarily to provide a fund to help such people.
For now, I continue to think that the easiest short-term solution to implement is to provide government-backed credit lines for every bank account. That way, people can continue to pay their bills.
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