The Intelligence from The Economist Fiscal firepower: governments’ covid-19 aid
Mar 25, 2020
Duncan Weldon, Britain economics correspondent for The Economist, and Ted Plafker, the China correspondent, discuss the financial landscapes shaped by COVID-19. They delve into the US's massive relief package and the strategies China deployed to ensure food security during lockdowns. The conversation highlights the balance of health and economic strategies, and also touches on the risks faced by crocodile hunters in the Congo Basin, revealing the intertwining of crisis responses and individual livelihoods.
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Economic Impact of Shutdowns
- Governments are shutting down economies to contain COVID-19.
- This causes a steep decline in GDP, worse than 2008.
Government Support for Businesses
- Governments are supporting businesses through loans and direct cash payments.
- They aim to "freeze" the economy and bridge the gap during shutdowns.
Wage Support as Economic Policy
- Governments should pay the wage bills of struggling firms.
- This approach, starting in Europe, helps both businesses and households.