Massive U.S. fiscal response to nurse the economy through the coronavirus crisis

• Published Month : Wednesday, 08 Apr 2020 12:00 pm

From technological glitches to confusion over the fine points of policy, the delays are mounting. The federal government’s muddled response risks deepening and lengthening a recession already historic for the speed of its onset.

The U.S. government’s massive effort to nurse the economy through the coronavirus crisis was billed as a send-money-and-don’t-sweat-the-details flood of cash to people and businesses in a $22 trillion system that has ground to a halt.

So far, the checks are not in the mail.

From technological glitches to confusion over the fine points of policy, the delays are mounting. The federal government’s muddled response risks deepening and lengthening a recession already historic for the speed of its onset.

States are struggling to process a historic mountain of unemployment claims on outdated technology. Large corporations, including companies slammed by the “social distancing” edicts keeping people at home, remain in the dark on the details of promised loans. Small businesses by the millions are desperately seeking cash, while banks still lack the right paperwork days into a lending program.

The Federal Reserve, quick to throw a backstop here under large portions of the financial system and major corporations through open-ended bond purchases, has yet to complete a promised "Main Street" program of an all-encompassing safety net of credit.

Making matters worse, the original $2.3 trillion in aid that was passed by Congress late last month isn’t nearly enough, businesses warn.

Every day that passes without federal money getting to people is “an unnecessary hit to businesses and households across the U.S.,” said Gregory Daco, chief U.S. economist at Oxford Economics.

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