When a financial crisis or pandemic causes massive unemployment, the government should borrow lots of money and give people the money. (Or buy them things they need, or build infrastructure if it's safe.) This is just good public finance.
It's an automatic win on interest rates. As a crisis hits, lenders worry that whoever they lend to might fail. So who will they lend to? Well, they don't think the government will fail (and if it does, who knows what anything is worth anymore?) so they want to focus their loans on the government. The government gets easy money -- low interest rates -- when the people can't. The people need money. Solution: the government borrows the money and gives it to the people.
Alongside the value of preventing immediate human suffering, there's a long-term value in making sure people's lives don't get disrupted. If people are becoming homeless or courting disease in desperate attempts for money, it's bad for the long-term productivity of everything around them. IQ studies detect negative effects from maternal stress, which money problems will create. In general, poverty degrades human capital.
So: the government borrows cheap when nobody else can, helps people, and defends human capital. Bet on your well-defended and flourishing humans to pay back the low-interest loan. They can do it.
It's an automatic win on interest rates. As a crisis hits, lenders worry that whoever they lend to might fail. So who will they lend to? Well, they don't think the government will fail (and if it does, who knows what anything is worth anymore?) so they want to focus their loans on the government. The government gets easy money -- low interest rates -- when the people can't. The people need money. Solution: the government borrows the money and gives it to the people.
Alongside the value of preventing immediate human suffering, there's a long-term value in making sure people's lives don't get disrupted. If people are becoming homeless or courting disease in desperate attempts for money, it's bad for the long-term productivity of everything around them. IQ studies detect negative effects from maternal stress, which money problems will create. In general, poverty degrades human capital.
So: the government borrows cheap when nobody else can, helps people, and defends human capital. Bet on your well-defended and flourishing humans to pay back the low-interest loan. They can do it.
