Thursday 28 May 2020

The COVID and the damage done

Wednesday's Law & Economics Association of New Zealand lunchtime panel discussion on limiting the economic fallout of COVID included Andreas Heuser, me, and Richard Meade. 

Panel Discussion on Limiting COVID Economic Fallout – 27 May 2020 from Andreas Heuser on Vimeo.

Richard made the case for running something like the student loan scheme for non-students, and for business. Richard and I independently hit on the idea of extending the student loans scheme to non-students. I'd pitched it back in March as part of our initial COVID-response batch of papers. I still think it rather preferable to helicopter-money options.

I went through the importance of scaling up contact tracing as alternative to future lockdowns, suggesting we use a structure like the Army Reserves. Get trained in it, spend a weekend a year on a refresher course, and be ready to be called into service if needed. Then I went through the case for safely reopening the borders before re-emphasising the need to maintain fiscal prudence if we want to get out from under the debt COVID makes us take on.

Andreas covered impending liquidity crunches and contrasted NZ's business support regimes with some of those found abroad. I still need to wrap my head around the idea that IRD is acting now as a bank. 

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