The magic number so far — the amount of federal money necessary to protect our nation from COVID-19’s economic devastation — is $1 trillion or more.
That would be among the biggest spending packages in U.S. history. And it would be as justified. Our nation has spent like that in wartime, such as after the Japanese attack on Pearl Harbor, and we are at war — this time against a virus — again.
But unlike in the recent past, we had better spend it right.
That means getting most of that money straight into the hands of the working people and small businesses who have been hardest hit by the spread of the coronvirus. It means helping first the small restaurants, hardware stores, auto shops and storefront hair salons — and their employees — before running to the aid of Wall Street and the big corporations.
As it stands now, the Trump administration has proposed to make $250 billion in near-immediate direct payments to U.S. households, with another $250 billion going out months later if the economy does not improve. Small businesses would receive another $250 billion.
There are so many unanswered questions. In a nation of some 130 million households, how much money would each family or individual receive? Would the payments be income-based? Or would a North Shore corporate lawyer be treated the same as a short-order cook?
The Trump administration proposal is separate from a proposed $100 billion aid package — for emergency food aid, free virus testing, and sick pay — approved by the U.S. House.
The Trump administration also proposes to set aside $250 billion for hotels and casinos, which have been hammered by the coronavirus pandemic as Americans hunker down at home. And the airline industry, which has been slammed, could be in for at least $50 billion in federal funds.
These are major industries that employee millions of Americans, directly and indirectly. They should not be allowed to fail.
“This is tough for airlines and cruise lines,” Steven N. Kaplan, a professor at the University of Chicago Booth School of Business, told us. “You want them to be able to keep operating.”
Workers first in line
But we’ve been through this before. We’ve learned. Any federal bailout or economic stimulus package now cannot be allowed to repeat the mistakes of 12 years ago, when CEOs and shareholders stood first in line.
“The aid has to be workers first if we’re going to help these industries,” Senate Minority Leader Chuck Schumer said in a news conference Tuesday. “Not what happened in 2008, where the big boys got helped and the workers and everybody else were left by the wayside.”
American workers were anything but first in line when the Bush and Obama administrations ladled out $830 billion to save the banking and auto industries. The cash rained on Wall Street bankers and their pals, with much of it fortunately paid back over time.
A huge cash infusion by the federal government has the potential to help millions of Americans while steadying the economy, preferably from the ground up. But we’d like to see additional measures taken, such as a moratorium on home foreclosures and evictions and extending the federal income tax deadline from April 15 to July or even later.
Economic hit will go on
As President Trump now acknowledges, this coronavirus pandemic could stretch through summer. The economic impact will continue as well.
Moody’s Analytics estimates that almost 80 million American jobs are at risk in some way — a reduction in pay, a furlough, a cut in hours or simply eliminated — from the coronavirus. That’s more than half of the 153 million jobs in this country.
Begin the bailout. Structure it from the ground up, and get it done now.
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