Las Vegas casinos for two weeks, and the Centers for Disease Control and Prevention (CDC) has advised against holding more than 50 people-many companies may find that their cash flow will be zero. Without government help, they would be forced to fire employees and do everything possible to maintain solvency. Consumers will also have to save money for the next few months. This is not a problem the Fed can easily solve. That’s why Powell says fiscal policy is the only measure that can help affected industries and businesses.

“We believe that a proper policy response requires coordinated and robust action on both the fiscal and monetary fronts,” wrote Bank of America economist Michelle Meyer. “We also need to see the Treasury take action to provide financial support. However, we don’t think this will stop the economy from weakening.”

Bridge Water Fund ’s co-chief investment officer and co-chairman Ray Dalio ’s signed article in the Financial Times expresses the same point of view: “What the Federal Reserve can provide — slightly reduced borrowing costs and / or Printing money and buying financial assets-won’t help those in need. Those who are struggling individuals and companies (apart from good medical support) need financial support to get through the temporary severe decline in income. “

“This crisis is not a test of the economic viability of individuals and businesses. The cost of not providing assistance will be greater than the cost of providing assistance,” Dalio wrote.

What else can the US government do?

Before the US Federal Reserve cut interest rates, Barron’s published an article that reviewed the stimulus measures that have been implemented so far-and those that have not been implemented but are still needed:

· Fiscal measures

Economists predict that the United States will adopt two types of fiscal measures: one is to immediately solve the cash shortage problem of millions of people and small businesses while trying to stop the spread of the virus, and the other is to deal with the current almost The wider impact of the recession that everyone is expecting is coming.

Trump waived interest on all student loans held by government agencies, and said the government would soon announce other measures. As conferences and sporting events were cancelled, the epidemic forced people to stay at home, holidays were cancelled, patients were also told to be separated from their homes, and the livelihoods of millions of people are closely related to these industries. Economists expect them to receive targeted assistance.

· Assisting businesses

The bigger task is to help solve economic problems, as all industries are dealing with gradual pauses in spending, disruption of supply chains, and large-scale economic crises worldwide. Economists believe that measures that can be taken include: wage tax deductions, infrastructure bills, and the government to accelerate the capital expenditure cycle by accelerating the purchase of everything from cars to computers. Any such big action takes time. Possible catalyst: sharp increase in the number of people applying for unemployment insurance for the first timeRise. Steven Blitz, chief US economist at TS Lombard, said: “When it starts to soar (two or even three times), it will draw political attention from Republicans and Democrats and make a major effort together.”

· Helping the family

Last Friday (March 13), the House of Representatives passed a bill to support families, including promoting free coronavirus testing for everyone, including those without insurance, strengthening food reserves, and school closures Student meal. Economists are considering other measures, such as targeted tax cuts, paid sick leave and increased unemployment insurance. The government may look for other ways to help small businesses get low-interest loans, and economists see such measures as essential.

Torsten Sløk, an American economist at Deutsche Bank Securities, said: “You need to put money in the hands of those who are going to spend it, those who are going to spend it immediately. Consumers or companies, instead of saving money, they use it, for example, to keep workers’ jobs and maintain economic support. “

But Dalio is concerned that coordination of monetary and fiscal policies may be difficult to achieve because of “huge wealth gaps and political differences.” “Can our fragmented political system achieve the goals we need to achieve. The leaders of this political system are more inclined to fight each other than cooperate.”