Infrastructure is a “bet” that we are still going to be here as a nation in 50 years. Roads, bridges, sewers... all of these need maintenance, upkeep, and replacement/repair. The U.S. has accrued a lot of deferred maintenance so there’s a lot of work to be done.

Regarding the prior economy, yes, it was healthy. Very healthy. But that’s not going to just come back no matter what anyone tells you. Significant damage has already been done. Further, I don’t think it’s very likely we are going to open things up in 2 weeks or even a month and whenever we do consumer behavior will take quite a while to get back to normal. Infrastructure jobs can provide a useful bridge.

For reference on consumer behavior, movie theaters in the US did $5,500 in ticket sales last week vs $200,000,000 a year prior. Even without a universal “stay at home” mandate, consumers have radically changed their behavior.

The unfortunate part about it is that Fed and Treasury will eventually run out of bullets to combat even bigger crises. Even Keynesians seem to ignore that he advocated for balanced budgets during expansionary periods.

IMO, it probably means we are NEAR a bottom, but the end result will be re-inflating an even bigger bubble. Which will crash in 3, 5, 10 years from now again just like this one.

The unfortunate part about it is that Fed and Treasury will eventually run out of bullets to combat even bigger crises. Even Keynesians seem to ignore that he advocated for balanced budgets during expansionary periods.

I certainly believe we could use infrastructure work, but I don't see how it makes sense as C19 project. The only reason anyone is out of work is because of the virus. Those jobs and businesses will come back. Most of them have nothing to do with infrastructure construction and maintenance. Rather they are service and entertainment jobs. If they leave to work on construction, how will the original companies get them back when they need them?

$2T is about 10% of GDP for the whole year. If say the shutdowns cause a 30% drop for 2 months, and 10% for another year, then we'd need $3T total cash infusion to replace all the lost GDP. If this is targeted to where it belongs, no company or individual should go bankrupt over this. The initial $2T isn't targeted that well, but hopefully any addition will be better. Also not all the GDP needs to be replaced, but close.

Using my wife's spa as an example... they are forced to shut down. All the employees are laid off and making much more than they did before! Big screw up by the feds but no worries. The owner is also getting a UE bonus over their claimed salary, but currently there doesn't appear to be any relief for rent, utilities, or loan obligations, so the owner is going to be bleeding some cash. She'd need to undo the UE and put everyone on SBA-loan payroll to get relief for expenses, but this isn't nearly as good for the employees as UE.

When the spa opens again it will be tricky, since business will not return to normal for a good while. But if the feds are smart, they can deal with that as well. Use the SBA loans to pad payroll for as long as it takes.

So... bottom line is, it isn't great for the business owner, but it doesn't need to be a disaster. Everyone else will do great.

Overall, the only "pain" I see is a loss of profit during this period, which will substantially reduce earnings, but it will be temporary. I don't believe the stock market will care once the future is more certain.

Yes. It worked. And it can work again.

There is ZERO need to create jobs. Unemployment was very low before people were forced to stay home, and those jobs will come back. Creating a fed funded competing industry would make no sense. They wouldn't be able to work now for the same reason everyone is out of work, and later it would just cause more disruption.

The smart move is for the fed to intelligently cover individual and business losses for the duration. Padding unemployment was an idea I favored, but only to bring it up from ~50% to ~80% of a person's base pay. The $600/wk addition is ridiculous. Similarly I'd like to see businesses being able to get a low interest loan immediately, which can later be forgiven to cover rent, mortgage, utilities, and whatever else is necessary to stay solvent when they are shutdown, or running at reduced capacity. The reduction could be based the prior year's activity. Again this should cover a % of the loss, not the full amount.

If they are smart about it, nearly every business and person should emerge from this with little damage.

I like your optimism, but some of those jobs may never come back, or if they do it will be a year (or 3) down the road.

The feds seems to have signaled their intention to bail out businesses and individuals for as long as it takes. IMO this is the best thing to do, so long as they are smart about it.

How much retail never comes back? There are a lot of retailers who have been on the edge for years. Any seasonal inventory is out of season by the time they reopen. Loans won't help a business already struggling under heavy debt load. EVERYONE gets more familiar with online shopping. This could be the catalyst for the final seismic shift in retail.

Yup, good luck with that. Cue up Japan's "Lost Decade"

No relevance.

surely there is some level of Federal debt where it becomes a legitimate problem. I don't know what that is, though. 150% of GDP? 200%?

Loss of inventory should be covered (ie it would be smart). The loan is just a temporary measure that will eventually be forgiven to the extent of the loss.

Isn't everyone already familiar with online shopping? I don't believe people will be any more or less likely to visit B&M shops when this is over... at least I know it won't effect me. I do almost all my shopping online anyway.