Illustration: Sarah Grillo/Axios

The White House has pledged to spend "whatever it takes" to win the fight against the novel coronavirus, and to that end has put forward a $1 trillion bailout package.

How it works: Half the sum will be spent directly, in the form of checks sent to American households. Details are still being worked out, but there will be an element of means testing, with poorer Americans getting more money.

  • That makes sense, because richer households are already getting an involuntary cash injection of their own, in the form of foregone consumption expenditures.
  • A personal datapoint: I looked at my 2019 credit card summary, and fully 40% of my spending went toward travel, entertainment, and restaurants. My enforced frugality on those fronts will be worth well over $1,000 to me by the time I'm out and about spending again.

The other half of the bailout goes to corporations, who already received a trillion-dollar giveaway in the form of the 2017 tax cut.

  • The corporate bailout isn't a cash grant, though. Instead, it takes the form of secured loans. That's a smart way of giving businesses the liquidity they need to keep on operating, without the money going to shareholders or even bondholders.

Small businesses will also be eligible for government-guaranteed loans — but it's not obvious how they're supposed to be able to repay them.

  • One good idea comes from Adam Ozimek and John Lettieri of the Economic Innovation Group. They suggest that the loans should amortize over 20 years, with a three-month grace period, and carry an interest rate of 0%. The loans should also be available for much more than just maintaining payroll, which is the focus of the Treasury Department's proposal.
  • Another good idea comes from Toby Scammell, the CEO of Womply, a payments data company. Take every small business merchant account in America, and simply deposit their average daily volume into their bank account every day until the crisis is over. The money then would be repaid over time with an automatic 5% charge on new inflows.

Why it matters: As my credit card gathers dust, businesses around New York and the world are losing income, unable to make payroll. The Danish government has offered to pay as much as 75% of the wages of employees in businesses hit by the coronavirus. That, or something even bigger, would help a lot of U.S. businesses weather the present storm.

Go deeper

Updated 40 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 a.m. ET: 31,346,086 — Total deaths: 965,294— Total recoveries: 21,518,790Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 6,858,130 — Total deaths: 199,890 — Total recoveries: 2,615,949 — Total tests: 95,841,281Map.
  3. Health: CDC says it mistakenly published guidance about COVID-19 spreading through air.
  4. Media: Conservative blogger who spread COVID-19 misinformation worked for Fauci's agency.
  5. Politics: House Democrats file legislation to fund government through Dec. 11.
  6. World: U.K. upgrades COVID alert level as Europe sees worrying rise in infections — "The Wake-Up Call" warns the West about the consequences of mishandling a pandemic.
2 hours ago - Technology

Why Puerto Rico is still struggling to get online

Illustration: Sarah Grillo/Axios

Internet connectivity remains a weak link for the disaster-wracked U.S. territory Puerto Rico, and some experts fear a new tranche of Federal Communications Commission subsidies set aside just for the island might not help the people most in need of a broadband connection.

Why it matters: Puerto Rico is locked out of most federal funding available to U.S. states to help expand internet service. The island risks being left behind as carriers expand and upgrade high-speed internet networks elsewhere, even as infrastructure-damaging tropical storms come faster and harder and the pandemic makes broadband even more of a must-have.

The price of Washington's stimulus failure

Illustration: Eniola Odetunde/Axios

America's elected representatives have failed America.

Why it matters: The bipartisan inability to deliver economic stimulus could impede economic growth for months to come. It will create widespread damage across America — from small businesses to large industries to schools and day cares — and leave many Americans without jobs or homes.

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