[Mick]

What you are describing is the well-known parable of the "broken window fallacy" or the "glazier's fallacy"

https://www.investopedia.com/ask/answers...allacy.asp

Money spent repairing the damage can't be used for something else.  Even if it is insurance money, it will mean higher insurance premiums in the future, which will sap businesses of cash flow they will need to recover.  And for the businesses that don't come back, boarded up, unoccupied buildings will drag down property prices long after we've moved onto the next news cycle.  It took decades for riot-affected areas in LA to recover after the Rodney King riots.

https://www.huffpost.com/entry/twenty-fi...ccounter=1

Many shops and restaurants, already reeling from COVID-19, may decide that having their property destroyed is the last straw.  Or maybe they simply don't have the capital to repair and reopen.  This is an awful one-two punch to a lot of businesses that might have been reopening or on the verge of reopening.

BC

True if velocity = 0.

I'm making the assumption that the money could be used through accelerating velocity.  The businessperson pays the glazier, who pays the rent and salaries and raw materials, and each of those have greater ability to pay, etc.

[Mick]

What you are describing is the well-known parable of the "broken window fallacy" or the "glazier's fallacy"

https://www.investopedia.com/ask/answers...allacy.asp

Money spent repairing the damage can't be used for something else.  Even if it is insurance money, it will mean higher insurance premiums in the future, which will sap businesses of cash flow they will need to recover.  And for the businesses that don't come back, boarded up, unoccupied buildings will drag down property prices long after we've moved onto the next news cycle.  It took decades for riot-affected areas in LA to recover after the Rodney King riots.

https://www.huffpost.com/entry/twenty-fi...ccounter=1

Many shops and restaurants, already reeling from COVID-19, may decide that having their property destroyed is the last straw.  Or maybe they simply don't have the capital to repair and reopen.  This is an awful one-two punch to a lot of businesses that might have been reopening or on the verge of reopening.

BC

True if velocity = 0.

I'm making the assumption that the money could be used through accelerating velocity.  The businessperson pays the glazier, who pays the rent and salaries and raw materials, and each of those have greater ability to pay, etc.