Within the past two decades we have experienced two great economic crises, the 2007 recession and the Covid-19 dislocation. We were prepared for neither, so the remedies were inefficient, insufficient and harmful. Too many people were economically crushed by each recession and the national debt increased too much; that is, had we responded rationally, then fewer people would have lost so much and the national treasury would not be so emptied (indebted).
Here are some emergency government actions that should be prearranged and ready for future economic crises – these in addition to standard safety-net responses.
1) Pay a modest need-based wage supplement to all adults, rather than the flat emergency payment. Not enough to de-incentiveize work.
2) Levy a temporary personal-wealth tax, enough to cover much of the extra treasury draw. This recovers some of the dollars transferred from treasury to the rich by Republican tax cuts.
3) Temporarily slow all debt payments and rent payments, so the above modest wage can prevent defaults and bankruptcies. Payments should suffice to preserve essential banking service.
4) Temporarily and reversibly adjust mortgage bases to partially blunt effects of neighborhood-wide property-value snowballs/dominoes. This shares such owner risks between borrower and lender. Far fewer owners would then go under water. I discussed this earlier: https://ethicsblackhole.blogspot.com/2018/10/flexible-mortgage-contracts.html
5) Prohibit excessive mortgage-loan riskiness now, eg excessive interest jumps, excessive 2nd mortgages.
6) Frustrate property predators, vultures, speculators, corporations, foreign investors.
How should this emergency-action list be modified and elaborated by astute ethical economists, ones concerned with survival and justice as well as domestic tranquility? There is still the homelessness problem and the trade-balance problem needing such economists, also the overpopulation and environmental problems, also the problem technologists and automation displacing workers.
I despair seeing that reason withers as tribalism thrives.
