It’s not 9/11 or a housing crash. So what’s the coronavirus fiscal playbook?

The early stages of the coronavirus outbreak have had an acute impact on a relatively narrow set of industries and places. Airlines are warning of huge losses. Cruise operators are reeling. Restaurants are losing business in cities with substantial outbreaks, or where large events have been called off.

There are clear humanitarian reasons for helping the people who will lose jobs or income because of the outbreak. But there are also economic reasons. The clearest way for the virus to cause a recession is for the impact to spread beyond directly affected sectors, as people who lose jobs are forced to cut spending, leading to further job losses. Government programs could help prevent that.

“What a fiscal stimulus can do is try to erect firewalls as much as possible and try to make sure it doesn’t ripple out and affect the rest of the economy,” said Josh Bivens, director of research for the Economic Policy Institute, a progressive think tank.

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