Fed's Bullard: Coronavirus shutdown not a recession but an investment in survival

No arguments about bailouts or"moral hazard" - the sticky issue of publicly funded rescues of bad actors.Recessions are the ordinary - even predictable - contractions in activity that mark the end of normal business cycles. Bullard, who has earned a reputation inside the Fed for a penchant to rethink problems and reframe debates, said this is anything but.

The spread of the coronavirus has touched off those discussions worldwide, but with an urgency that is shredding old hesitancies. United Kingdom Prime Minister Boris Johnson's government on Friday announced it would pick up 80per cent of the national wage bill for the next three months. The recent jump in unemployment claims? That's a win, a sign that so-called government stabilizers are being used. The hope should be that such programs get"crazy heavy use" in coming weeks, he said.

Bullard was among the large group at the Fed who at first felt the virus risk would pass with little economic damage, as have other similar health scares such as SARS and ebola. For now what's usually good - jobs and production - are bad, and the headline numbers are going to be staggering. Bullard said the"core aim" can be kept simple:"keep everyone, households and businesses whole through the second quarter." Do it with a quick expansion of unemployment insurance to cover lost wages, and through grants and loans to business to cover losses from"unemployed" capital.

Thank you M. Bullard, we will change the definition of recession in all the dictionaries accordingly.

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