Economist types don't seem to agree on the most basic approaches to solving the pandemic's financial fallout. Should we have war bonds or not?
Joe Weisenthal says no:
Nathan Tankus adds:
Maddeningly, the easiest problem to solve -- this financial one -- is likely the one that congress will have the most trouble with. The question of resourcing the pandemic one is a matter of supply chain and factory reconversion experts, not economics per-se. What careful economic analysis can tell us is that while we’re on a war-time footing, we’re not dealing with war time resource allocation problems. Any resource that can be safely mobilized, can and should be mobilized and responding to our protective equipment bottleneck will allow us to access a lot of idle resources that are easily available.
One of Weisenthal's Twitter commenters summarizes his remarks thusly:
"War Bonds" during WWII were used to incentivize the private sector to postpone "non-essential" purchases. This would enable the govt to crank up the War Machine to 11 without having to compete for resources.
This conception of WWII savings bonds isn't common knowledge -- it certainly hasn't found its way into the current administration's thinking.
Both Tankus and Weisenthal are Keynesians; in simplest terms they advocate using keystroke money to deal with a calamity. Trump is de facto using keystroke money but still stuck on the idea that bonds need to be used to "pay for" emergency relief.