A well-designed package should contain two elements:
Support for vulnerable households—along the lines of Strain’s proposal above—will help these households navigate the period of depressed economic activity that we are about to enter.
Support for directly affected vulnerable businesses will help these businesses bridge the inevitable gap in revenues caused by the necessary economic slowdown.
Many proposals have called for the first element, but the second is just as important if we are to avoid widespread business closures.
Many of these businesses would be otherwise viable, taken out not because of bad decisions but because of a once-in-a-century pandemic that’s difficult to hedge against. And with those closures go all the valuable things these businesses have worked hard to build—the products, processes, knowledge and relationships that make them unique.
If these closures were allowed, it would take a long time for new businesses to form, raise capital, grow and hire new workers. It would be a surefire recipe for a long and painful recession.