[stupac2]

That's why I tend to think reopening is a sideshow, we'd be better off just following the advice of the epidemiologists, but also do some crazy stimulus that makes what we've done so far look timid. It doesn't seem like this is forthcoming, which is depressing, because I think that leaves us with a menu composed mostly of various flavors of shit sandwiches.

Unfortunately, a crazy stimulus at some point makes the money worthless with Weimar Republic inflation levels. Or, for more recent cases, see Argentina. Until we have an economy that can actually open to do business, it isn't a "stimulus". It is just keeping people from starving. We have to do it, but confusing it with a stimulus is IMHO an error. There is an underlying reality that can't be ignored. I think the menu is composed exclusively of shit sandwiches. There is no "obvious" good choice. It is difficult to know which set of choices is least bad.

As GR says, right now deflation is a much bigger worry than rapid inflation. It's also been, what, 20 years since we've seen inflation reach (gasp!) 4%? I just don't see any reason to worry about it, especially if the stimulus is coming from the fed so they can just turn off the spigot if needed. Really, what I'd like to see is a law instructing the fed to start nominal GDP targeting (where you target nominal, that is non-inflation-adjusted, GDP growth per year) and authorizing them to send payments to individuals (with whatever caveats you like, I personally don't care about means testing, especially in this context, because the only downside is inflation and money sent to rich people has a very low fiscal multiplier because it's just saved, but if you had to do it then so be it). Not only would that help a lot currently (well, you know, if the NGDP targeting hypothesis is true, anyway) but it would be a powerful tool for fighting future recessions.

You'd also want to do a bunch of fiscal-side stuff. Hard to say what would be best there if you did the above proposal but I'm sure there are a bunch of good things you could do, infrastructure and investments and various types of aid to distressed organizations (or governments) and whatnot.

Basically, with inflation and interest rates very very low it seems like the real worry is doing too little vs too much.

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Making low-income people choose between their safety and their finances is morally questionable...

Perhaps.  But shouldn't they have that choice, versus enforced safety and crippled personal finances and perhaps homelessness?  I don't want to mandate anyone to go to work if they don't feel safe, and no one is questioning that.  After all, there's 26 million+ workers available for work.  A fair number of them would probably want to work.

Sure, but it would have to be a somewhat fair choice (not being put into a "pay rent or risk getting covid" situation), and I'm not sure how that could actually be arranged. It would require some needle-threading, that's for sure.

[stupac2]

That's why I tend to think reopening is a sideshow, we'd be better off just following the advice of the epidemiologists, but also do some crazy stimulus that makes what we've done so far look timid. It doesn't seem like this is forthcoming, which is depressing, because I think that leaves us with a menu composed mostly of various flavors of shit sandwiches.

Unfortunately, a crazy stimulus at some point makes the money worthless with Weimar Republic inflation levels. Or, for more recent cases, see Argentina. Until we have an economy that can actually open to do business, it isn't a "stimulus". It is just keeping people from starving. We have to do it, but confusing it with a stimulus is IMHO an error. There is an underlying reality that can't be ignored. I think the menu is composed exclusively of shit sandwiches. There is no "obvious" good choice. It is difficult to know which set of choices is least bad.

As GR says, right now deflation is a much bigger worry than rapid inflation. It's also been, what, 20 years since we've seen inflation reach (gasp!) 4%? I just don't see any reason to worry about it, especially if the stimulus is coming from the fed so they can just turn off the spigot if needed. Really, what I'd like to see is a law instructing the fed to start nominal GDP targeting (where you target nominal, that is non-inflation-adjusted, GDP growth per year) and authorizing them to send payments to individuals (with whatever caveats you like, I personally don't care about means testing, especially in this context, because the only downside is inflation and money sent to rich people has a very low fiscal multiplier because it's just saved, but if you had to do it then so be it). Not only would that help a lot currently (well, you know, if the NGDP targeting hypothesis is true, anyway) but it would be a powerful tool for fighting future recessions.

You'd also want to do a bunch of fiscal-side stuff. Hard to say what would be best there if you did the above proposal but I'm sure there are a bunch of good things you could do, infrastructure and investments and various types of aid to distressed organizations (or governments) and whatnot.

Basically, with inflation and interest rates very very low it seems like the real worry is doing too little vs too much.

---

Making low-income people choose between their safety and their finances is morally questionable...

Perhaps.  But shouldn't they have that choice, versus enforced safety and crippled personal finances and perhaps homelessness?  I don't want to mandate anyone to go to work if they don't feel safe, and no one is questioning that.  After all, there's 26 million+ workers available for work.  A fair number of them would probably want to work.

Sure, but it would have to be a somewhat fair choice (not being put into a "pay rent or risk getting covid" situation), and I'm not sure how that could actually be arranged. It would require some needle-threading, that's for sure.