Saez and Zucman that is. Their solution to coronavirus:
The most direct way to provide this insurance is to have governments act as payers of last resort, so that hibernating businesses can keep paying their workers (known in economic terms as idle workers) instead of laying them off, and can keep paying their necessary bills such as rent, utilities and interest instead of going bankrupt.
In practice, in the US, the unemployment insurance system is already up and running, making it possible to compute and deliver compensation to idle workers. Workers should immediately start receiving special unemployment insurance benefits so they are no longer a cost to their employers – even though they stay formally employed – and no re-hiring process is needed once they can come back to work.
Self-employed individuals (such as gig workers) could report themselves as idle and be eligible for this special unemployment insurance. In case of partial idling – if someone’s working hours have been cut – unemployment insurance benefits would be prorated.
These benefits would be progressive if they replaced a higher fraction of earnings for low-paid workers. This is a desirable feature, as low-paid workers are more likely to be affected by the lockdown (ie less likely to be able to work from home) and less likely to have savings to replace a temporary loss in earnings.
In the payer-of-last-resort programme we envision, businesses on lockdown would report their monthly necessary costs of maintenance and receive payment from the government. Necessary costs are rent, utility payments, interest on debt, health insurance (in the US) and national insurance contributions (in the UK) of idle workers, and other costs that are vital for the maintenance of businesses. For partially shut down sectors, governments would pay a fraction of the maintenance costs. The amounts don’t need to be exact; verification and correction can take place once the lockdown is over. Any excess government payment could be transformed into an interest-free loan that could be recouped over several years.
Hands up everyone who thinks that the bureaucracies of the US or UK could actually do this in less than many, many, months?
Quite, so that’s not going to work then, is it?