The speed of the threat to the world economy has been stunning.
Equally, the monetary response has been huge. And getting huger (if that is a word) as evidenced by the latest US Fed move.
But you can't help but get the idea that we are just starting. More than US$5 tln in US monetary action plus US$2 tln in US fiscal action just doesn't seem enough to put their economy genie back in the bottle.
So minds are turning to what will.
Of course, the easy answer is, nothing will. But in fact, something will, even if it isn't a neat and entirely satisfactory solution.
"We have to do something."
New Zealand seems to have things under control. China too, somewhat, even if it is staggering.
But Europe and the US are the key economies that need to do something extraordinary to prevent the world from falling into a deep depression.
Subsidising businesses and workers can only ever be a transitional activity. And transitioning to what?
The next big impact will be that tax revenues collapse.
And that means that massive Government borrowing is about to have very long-term consequences. Sure it may save today, but consign the future to a less-than-ideal situation
Two high profile economists thinking about the looming problems see a raft of giant issues that need addressing.
Ballooning deficits are going to need some form of austerity, if only for the fact that borrowed money needs to be paid back. One clear lesson from the GFC (which in perspective is a relatively minor blip compared to what we are facing) is that most countries didn't return to 'normal' fast enough, delaying paying those GFC bills, and so we start facing this calamity in a worse position.
New Zealand is an exception here. We not only got through the GFC relatively safely, our debt levels (especially our public dent levels) haven't ballooned - even after getting a major natural disaster in the middle of the GFC. New Zealand has been uniquely blessed with generally good government. But not so most of the rest of the world, especially Europe, Japan and the USA, all of who have massive existing debt overhangs.
Those big country issues include what is now clearly counterproductive austerity, and "a poisoned political economy".
As they note this will strain already fragile relations between countries, "possibly to breaking point". And they correctly point out "it will also worsen the intergenerational rift. Leaving our children with an unaffordable fiscal burden, on top of a climate catastrophe is not the legacy we wanted, nor one they might be willing to take."
They call for "shock and awe necessary to get ahead of the pandemic, and deliver us from counter-productive future austerity, political conflict, and intergenerational schism."
And they call for the creation of new money.
Their specific proposal is to print, but this time for the fiscal authorities.
"The decade since Lehman’s collapse has already seen central banks break many taboos, but they must now cross the Rubicon of monetary financing. The case for them to do so has never been stronger, and in fact it may be irresponsible for them now not to do so," they say.
The traditional notion of helicopter drops, wherein central banks transfer cash balances to citizens, are being talked about again, but they work best when the problem is primarily insufficient demand. Moreover, the plumbing to make these drops work is not yet in place, and time is of the essence.
This crisis is different. It is governments that need to spend on healthcare, employment, critical supplies, state aid and bank rescues and are best placed for targeted interventions on all of these fronts. A one-off transfer of 20%-30% of GDP worth of cash to governments by their respective central banks may be the single best macro policy to fight the COVID-19 crisis.
It will provide the kind of lightning speed and gargantuan scale needed to outrun the meltdown and will leave no debt overhang or counterproductive future austerity. It will help avoid the kind of hesitation, from governments trying to raise cash or balance books, that can literally kill citizens and destroy economies.
They expect such a proposal will be met with fierce pushback, especially in the EU and especially by Germany. But as they say, this crisis is unprecedented and "gargantuan". And fiscal responses are the key, not monetary ones.
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