The coronavirus pandemic is unique in so many ways. It’s unique because of its destruction in terms of human life as well as its disruption to our way of life.
I’m not a scientist, so there’s no need for me to go further down that road. I am, however, an economist and a student of behavior. And here’s what I know: COVID-19 is even worse than we are being told. Consider the following.
We’re being told to “shelter in place” as governors issue stay-at-home orders. This is unprecedented because the fear is real. Lives are at stake. But as we focus on saving the lives of our fellow citizens, we can’t forget about the harm this is having on our economy, especially our small businesses. Shutting down our economy may be as deadly as the virus itself.
We need to protect the economy now.
The lack of consumer spending is moving us closer to another Great Depression. About 70% of our economy is linked to consumer spending. Without it, we’re headed toward an economic disaster.
My simple idea is this: a direct delivery of funds from the federal government to consumers that will immediately help the most desperate industries — restaurants, bars, small retail, and travel companies. Allow consumers to spend money and inject revenue to help these essential industries that are struggling during this economic crisis.
The plan is administered through a prepaid debit card to every household. I even suggested calling it the “Trump Card” and mentioned it to President Trump when I spoke to him about this plan a few weeks ago (though I doubt Nancy Pelosi would let that name stick). Here’s how the debit card works:
- $1,000 for food (includes restaurants, bars, and delivery services)
- $1,000 for health-related goods (purchased anywhere from Walgreens and CVS to Walmart)
- $300 for travel or fuel (airfare, car fuel, electric bills)
But the most important factor is that consumers have only 30 days to use the card or the funds expire and remain with the federal government. It can’t be saved or hoarded like toilet paper because it’s about helping the economy get by right now. The point is to provide immediate financial assistance, allowing consumers to start spending right away to help struggling businesses and provide a boost for the local economy.
Of course, due to social distancing guidelines, it could be tough to spend $1,000 in a month at restaurants, and no one should hop on a plane right now unless they have to. But the money could be used on restaurant gift cards to be redeemed later when the economy is stable or on air travel scheduled for later this year. Either way, the businesses get the money they need now to make it through the quarantine period.
The cost of this plan would be about roughly $300 billion for each round of funding. That’s much cheaper than the $2.2 trillion program that passed Congress already. This is grassroots spending that gets injected directly into the economy. If further rounds are required, the government can easily reload the cards with new funds.
It’s simple. It helps families. It’s not a huge burden on the federal government. And most importantly, it would work right now.
Eric Bolling (@EricBolling) is an entrepreneur, commentator, and host of America This Week with Eric Bolling on Sinclair Broadcast.
