No, you would end up with another bank bailout, except this time the banks didn't do anything wrong and it was the government's fault for screwing up the pandemic response. In other words, it would be compensation for the government's failure, not a bailout.

Everyone wants to blame someone - e.g. its the governments fault! In reality, its just an external force that everyone is dealing with, a plague, if you will - its not anyone's fault; it just must be faced, that during a plague, there will be suffering, and there will be casualties. It's that simple.

No, it is not that simple. There are various ways to respond to a plague, and some are better than others. Some responses result in far more casualties than others, in addition to the economic damage. We can all see that some governments responded well and others did not.

> we can all see that some governments responded well and others did not.

Can we, though? We are not even half time yet (most likely). How are we going to judge a government in the beginning of a pandemic as if the pandemic was already over? Maybe what looks like a poor strategy now will turn out to be the best later. Same true for the economic bailouts, some countries went harder than others, and it's not yet clear which will work better.

There are some anomalies that's difficult to explain (Sweden, for example). Sure, we can retrofit some model, and imagine we have it all figured out, but could you have predicted it correctly?

What is the anomaly? Sweden has done substantially worse than all of its neighbors in both lives/health and economic impact. Which was exactly what many people predicted.

It's not clear Sweden has done substantially worse than its neighbors [0] and regardless we're not through this and different countries and counting a number of things differently.

5 years from now when we look at the death certificates from nations with reliable death certificate records, we might have a better idea.

[0] https://www.latimes.com/world-nation/story/2020-09-21/sweden...

No country is coming out of this unscathed. Even the ones that kept their cases low are going to be in a world of economic hurt. And they have far few ways to weather the storm than Western countries.

You're kidding, right? Look at unemployment rates in the EU or Japan compared to the US. These are all first-world countries and yet there is still a vast difference in outcome.

There are various degrees of being scathed. "Everyone gets scathed" is not an argument. Some did way, way better than others.

The US made a different set of choices to Western Europe with respect to unemployment. Europe (mostly) chose to maintain existing employment, while the US chose to make unemployment benefits much more generous.

In a short pandemic world, it's likely that the European strategy will perform better, while in a long pandemic world, the US strategy may perform better.

I do agree with the OP though, it's far too early to tell (except letting the unemployment benefits lapse in the US was almost certainly a bad idea).

Why is unemployment rate the definition of "success"? The US expanded unemployment insurance payment significantly. So if the gov't is giving businesses money to keep workers "employed" or just pay them through unemployment insurance, why is one better? It's still a gov't transfer to workers at risk.

And again, I wouldn't call out a "winner" just yet. Those decisions will likely have vastly different impacts post-epidemic.

What about all the reits? A lot of bonds are backed by mortgages. If no one is paying rent then aren't all property owners in serious trouble? What about the massive tax hit for all local governments from property taxes. This isn't a simple problem.

You're going to have to explain that one in detail for me. We have now generated trillions in liquidity for corporations. Maybe I'm dumb; walk me through how this would "crash the banks", real estate, and "the entire economy".

It creates a cascading effect. There's an insane debt bubble and a lot of that debt will lose rating, so many investors will drop it creating a feedback loop. Dumb money have to drop it because of their mandate and/or rules, even if this is bad for their other assets (i.e. more debt they hold).

This would be the dumbest idea right now. I hope government agencies worldwide can resist the attack from media.

[Don't get me wrong, fuck banks, evil hedge funds, and speculative landlords, but they are barely going to be hit by something like this.]

Banks will never, ever get caught with bad debt again. They learned the lesson in 2008. There's even regulation blocking that. This will be "dumb money" so our pensions and government funds. These take ratings agencies at face value and have no nuance and very slow to move on news like GP's feel-good idea.