This crisis calls for massive government intervention: here's how to do it

Coronavirus threatens the world’s economic life, and current proposals from governments around the globe are failing to match the scale of the crisis. Today, the chancellor, Rishi Sunak, announced £330bn of loans and that some companies would not have to pay business rates for the next 12 months. While loans help businesses in the short term, they do not compensate for losses and only allow companies to smooth costs over a longer period.

In the US, the Trump administration has suggested direct cash payments to individuals. Such measures (such as $1,000 given to each US household) help to alleviate temporary economic hardship but are poorly targeted: it’s too little for those who lose their jobs, and it is not needed by those who don’t. During social distancing, the goal should not be to increase demand, since people can no longer spend on many goods and services.