Leave as few financial scars as possible

Quite like this. No stimulus stupidities, just plain subsidisation for businesses whose trade has been throttled by Corona Fears. From Coronavirus: Big banks join business bailout.

The big banks are negotiating a multi-billion-dollar business rescue package with the Morrison government that could see taxpayers underwrite loans to small and medium-sized firms facing collapse, in a bid to avoid mass job losses and a deep recession.

The Australian understands the government is considering a loan guarantee to keep businesses afloat as part of Scott Morrison’s second-round economic rescue package, which could take the total government spend to more than $40bn….

The banks have been pushing for a version of the New Zealand model, which would involve cash payments to businesses to prevent them laying off staff. The banks favour the New Zealand scheme because of concerns that businesses may be reluctant to take on additional debt during an economic downturn.

The Bank’s approach seems to make a great deal of sense. Keep businesses afloat in a way that leaves no scars. Think of it as a form of war loan. Meantime, no increases in public spending.

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