On the homepage, Yuval Levin capably surveys the lay of the land on a potential Phase IV congressional response to the COVID-19 crisis.
Levin writes that Republicans are hearing it from constituent entrepreneurs that the unemployment-insurance scheme is poorly designed and prevents them from accessing paycheck protection loans.
That’s all true. But, while we all recognize that the government cannot indefinitely substitute for the economy, I still believe we have fiscal capacity to make small-business relief much more generous and predictable — namely by taking the limits off and providing it on a more as-needed, ongoing basis. The limits on small-business relief turned the program into a lottery, with banks having the ability to rig the machines.
Many small enterprises will need relief beyond “re-opening,” as continuing restrictions and a hangover of public confidence take their toll. It will be tremendously costly. But letting viable small enterprises die on the vine because of a public-health emergency will have the most grievous consequences. It would mean starting our recovery by kneecapping the very institutions that would help us climb out of the hole. And while it may not be anywhere near the worst trauma during this crisis, a generation of small businessmen and women watching their work destroyed through no fault of their own will be demoralized in a way that’s difficult to capture. I can’t begin to fathom the way it would slow down job growth.