Social Distancing Makes Sense Only With Extraordinary Fiscal Stimulus

Across the world, as governments take their first economic stimulus measures to address the Covid-19 crisis, debate is intensifying over the right form and size of that assistance. But this discussion hasn’t yet come to grips with five fundamental realities:

Governments around the world are awakening to these truths, and beginning to debate how to assist businesses suffering from the downturn. The U.K. is considering making grants to companies for up to 80% percent of salary, capped at 2,500 pounds ($2,900) a month; offering loans to small and medium-sized businesses; and taking equity stakes in airlines and other companies. Denmark has put forward a program to subsidize 75% of payroll for companies facing a need to cut jobs by 30% or more. France is considering equity injections and loan guarantees.