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Los Angeles, California, United States
The blog 'Breaking Bread' is for a civil general discussion, like you might have at the dinner table with guests. The posts 'Economics Without the B.S.' are intended for a general audience that wouldn't have to know the difference between a Phillips Curve, a Laffer Curve, or a Cole Hamels Curve. Vic Volpe was formally educated at Penn State and the University of Scranton, with major studies in History, Economics and Finance, and Business; and, is self-educated since by way of books and on-line university courses. His practical education came from sixty years of work experience in the blue-collar trades as well as a white-collar professional career -- a white-collar professional career in production and R&D. In his professional career and as a long-haul trucker, he has traveled throughout the lower forty-eight. From his professional career alone he has visited many manufacturing plants in the United States, Europe and China. He has lived in major metropolitan areas and very small towns in various parts of the United States. He served three years with the U.S. Army as an enlisted man, much of that time in Germany.

Sunday, August 23, 2020

A Proposal during the Pandemic to help small businesses asked to perform a social-welfare function

 

A Proposal during the Pandemic to help small businesses asked to perform a social-welfare function.

Economics Without The B.S.**: 
[**  Double entendre intended.]



So far, restaurants not recovering in the usual March to August time period -- data is only up to June.

If we are asking restaurants to operate at half capacity while we deal with the pandemic, are we asking them to perform a public welfare function? Should localities be paying for/reimbursing businesses for performing a public health function?

Can we do this by floating (selling) a bond issue by the local government, and the bondholders would be paid by the localities raising the sales tax? Can we float the bond on the public market, like other municipal bonds? Or, can the federal government/state government subsidize the bond's issuance? Or better yet (?) can our Fed be the buyer of the bonds, to subsidize the issuance, keep the bonds on their balance sheet as inactive reserves (like they did with mortgage pools from the Financial Crisis of 2008), not part of the money supply, somwhat similar to what any central bank does when a nation goes to war? -- this is sort of a national emergency.



Image may contain: text that says 'FRED 60,000 Retail Sales: Restaurants and Other Eating Places 50,000 40 000 0,000 20,000 10,000 2008 Jan 2009 Shading indicates recessions the most recent ongoing. Jan 2010 Jan 2011 2012 Jan2013 Jan2014 Jan 2015 Source: .S.CensusBureau Census Bureau Jan2016 2017 Jan 018 Jan 2019 2020 fred.stlouisfed.org'
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