Image: All the stars in the sky? NASA
John Cochrane, Hoover, in re: Does $2 trillion answer the hole in the US economy now that there’s no commerce? Of course not. We’ll just have to pay for it all in taxes. . . . We’re protecting the oldest among us with the future of the youngest of us. This economic shutdown is the panic button; you’re supposed to defend against a pandemic with [medical actions]. Larry Kudlow mentioned $6 trillion! Use the Defense Production Act? Not necessary; can just drop regulatory barriers. Maybe the Act was good for WWII. The Taiwanese, Singaporean and South Korean models: when you hear of a virus, quickly test test test; isolate people who have it and lock down their areas—that costs billions, not trillions. Bailouts, now called loans to troubled corporations. When you do that, you're bailing out stockholders and bondholders; a bankruptcy there is [not the end of the world]. Lending is better than grants. Handing out money then demanding that the govt appoint board members . . .! The Fed knows how to keep banks [alive]; I worry about non-banks, which could be on the edge of [a catastrophe] if we get a wave of bankruptcies..