In Jerome Powell’s November 5th meeting, the Fed chairman again called for further stimulus, saying, “I do think fiscal policy’s absolutely essential here.”
As the pandemic continues to surpass records daily, it has become apparent complacency has set in, likely as a result of “fatigue” from the pandemic. With two concurrent crises: economic and public health, creative solutions need to be considered.
My creative solution: enact additional stimulus that triggers state-by-state when COVID-19 test positivity falls below a certain threshold. Asking folks to modify their behavior on behalf of their vulnerable neighbors was initially effective, but as the severity of the pandemic has become hotly debated, “buy-in” to mitigate the spread of the virus has waned. I think a potentially effective way to restore a collectivist mindset to blunt spread of the virus would be with economic incentives structured this way.
Another benefit of this proposal is stimuli are most effective when money is immediately spent. By triggering the payout of this stimulus when the virus is relatively more contained, it would be paid out at a time of heightened consumer confidence which could be a boon for local businesses.
I see a stimulus like this as a bridge to widespread inoculation. With Pfizer/BioNTech’s recent vaccine announcement, there’s some hope that we see the light at the end of the tunnel. Let’s shape our public policy to make the path there as painless as possible.