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The Economic Perspective: “Bailout, Rescue, or Stimulus?”

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at bailout, rescue, or stimulus.   Mike, the federal government has committed trillions of dollars to the economy during the coronavirus crisis.  A significant part of this money is going to businesses, both large and small.  Whenever this happens, there’s a debate about the role of government when the economy faces trouble.  Should we have the same debate in the current situation?

 

Mike:  Summary Answer

  • Always good to have this debate
  • Most economists call what the government has done thus far a “rescue”
  • Support for households and businesses who have been economically hurt as a result of what has been needed to contain the virus
  • Can argue financial help to businesses is not a bailout because onset of virus was not expected – so no way to play
  • Whole point is to preserve businesses and households through the virus containment period
  • If help continues after the virus, then can call it a stimulus
  • I’m MW

 

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.