In a now–widely circulating TED Talk from 2015, Bill Gates told the audience, “we’re not ready for the next epidemic.” How prophetically right he was! Gates recommended steps we could have taken to prepare medically: “I don’t have an exact budget for what this would cost, but I’m quite sure it’s very modest compared to the potential harm.”
Our lack of medical preparation has now put us on our economic heels. In the absence of medical testing, stay-at-home orders are not just a good idea, they are essential. But they are bringing down our economy, and contributing to the panic that basic needs like food and shelter will go unmet as evictions and foreclosures skyrocket.
One way out is an emergency income. Put the outside world on pause. Pay people to stay home, eat and hope while our front-line emergency professionals rage against the dying of the light. Those of us who can work from home will keep the economy going as much as we can, but for everything else, we need life support.
Massachusetts cannot print US dollars. But we can take action: We can guarantee pre-coronavirus obligations out of future state tax revenue.
God Bless (and Curse) Universal Basic Income
Former 2020 Democratic presidential candidate Andrew Yang did a great service by popularizing the concept of a universal basic income (UBI), sufficient to keep us in hiding from coronavirus indefinitely. The “universal” part ought to mean not means-tested, applied to every human that can be infected. The “basic” part ought to mean able to cover one’s basic needs for civilized survival, including the true cost of one’s share of housing. The “income” part ought to mean continuing indefinitely.
But Yang also made a political concession which in hindsight leaves the whole idea argued about as much on the left as on the right. In fixing the amount of his proposed UBI at $1,000, he offered too little to cover the true cost of housing, food and healthcare in urban areas. And in limiting it to citizens over 18, he offered nothing for equally likely carriers of infection: non-citizens and children.
This would be enormously simplifying, especially as the complexities of saving an economy are distracting from the complexities of saving lives.
His intent at the time wasn’t that UBI would solve an epidemic, but the concept is applicable, simple and freeing. UBI is not receiving adequate attention primarily because we’re stuck thinking about our pre-coronavirus safety net, which we already knew was full of holes.
Small Business Safety Net Inadequate
Never mind the crisis we are experiencing in jails and shelters, even those of us fortunate enough to have our own housing are now insecure.
Unemployment assistance is viewed as a kind of savior in some circles. It may help a large number of individuals laid off or furloughed. But the week of March 20, applications were being submitted ten times faster than the system was designed to handle. And in Massachusetts, those of us who are self-employed, 1099 and Schedule E earners are ineligible.
The response for small businesses looks mostly like a patchwork of loans. The Massachusetts Growth Capital Corp. has created $75,000 loans and the Small Business Administration has expanded its Disaster Loan program for working capital, with up to $500,000 on simplified terms. But the MGCC seems to exclude companies that invest in real estate (it ought to have banned use of the funds for investment, instead of banning companies that invest; we are waiting on clarification). And the SBA process is complex, leaving out to sea small businesses that don’t speak much English or don’t use a computer.
Guarantee Everyone Money
The genius of a bunch of loans is a recognition that we don’t understand the complexities of the economy, and we don’t need to. We can throw up our hands and say, “Let’s just give small businesses the money!” As businesses so with individuals, we can throw up our hands and say, “Let’s just give everyone the money!”
The Massachusetts legislature need not wait for federal relief checks or more US dollars to be printed. We could pass a law guaranteeing all obligations entered into prior to the coronavirus. Unable to pay rent? Landlords, we’ll pick up the tab eventually. Unable to pay your mortgage, taxes, insurance and repairs? Bankers, cities, insurers and plumbers, we’ve got you covered, too. This would be enormously simplifying, especially as the complexities of saving an economy are distracting from the complexities of saving lives.
We will be reading about coronavirus in headlines for longer than anyone has yet said publicly, likely until a vaccine is invented and deployed over a year from now. If we can admit how little we understand the economy, we can put money into it at the most basic level in the form of a guarantee and/or basic income. This will help us flatten the curve with economic security however long the science takes.
Doug Quattrochi is the executive director of MassLandlords inc.