In my opinion the two (shutdown and relief) go hand in hand.
I.e. the US and UK have gone ahead wonderfully; the Philippines, China, Vietnam, Zimbabwe, South Africa.. not so much
What they have done is: - allowed companies who's income has dropped by 30% to claim $600/employee/week of salary support - negotiated with all the banks to allow mortgage holidays
Think of it as trickle up stimulus and trickle down rent subsidies to keep people connected to companies and as many companies as possible still viable
We're getting close to having Covid beat(only 5 new cases today, all from known sources), next week we slowly start dropping out of lockdown
Yes, government isn't some omnipotent god but neither is it some helpless pathetic entity that can't sort things out at a time of extraordinary crisis.
My assumption is that governments are taking on some sort of debt here.
(Even if you hardly needed to before just by sheer size.)
The idea you can simply shut down the economy at will and balance it with relief doesn't make economic sense.
Funny you say that because it seems to be no problem when it comes to bailing out corporate investors. Of course, near-zero federal interest rates didn’t make “economic sense” either, but yet here we are.
The term "bail out" is usually understood to mean replacing funds after the owner of them lost them through bad decision making. What's happening here isn't a conventional bailout. Governments have destroyed the businesses of private investors deliberately and explicitly - reductions in the damage aren't bail outs.
Bay area issued the first national stay at home order on March 13. By then demand had already dropped precipitously. If your restaurant is seeing 60% fewer bookings, are you going to keep as many wait staff? Are you going to order as much food? How is that going to impact your supplier? And their supplier?
On the flip side we have places like Smithfield food that stayed open and their workforce became infected. Smithfield alone has as many infected as the entire country of Sweden reported newly infected yesterday. These are problems of different orders of magnitutde. How does a factory stay open with 500 people infected at once?
And yet Sweden still disproves your point. Businesses have stayed open, including restaurants and other such businesses, and yet Swedish companies are not evaporating due to their workforces being too sick to work. That's not even close to happening, is it?
``` A record 36,800 people were handed their notice in March, more than 10 times the number from the same month last year.
The government has offered loans and guarantees and expects to increase expenditure by around 84 billion Swedish crowns ($8.35 billion) this year.
At the same time, the central bank has poured money into the financial system, offering 500 billion Swedish crowns in loans to companies via banks and boosting its purchases of securities by 300 billion crowns.
Banking group Swedbank said recently it expected the economy to contract 4% this year. ``` https://www.reuters.com/article/us-health-coronavirus-sweden...
The U.K. government is also backing loans for businesses to limp on with, interest free for the first 6 months or year (I forget the specifics).
Of course it doesn't. Governments all over the world aren't making decisions for the benefit of the economy right now, they're doing it to save the lives of their citizens.