Isn’t US’ coronavirus stimulus too small?

The Senate has passed a
$2 trillion spending bill to fight the economic devastation wrought by the coronavirus pandemic. [And Donald Trump signed $2 trillion coronavirus relief bill as the US tries to prevent economic devastation]. Time is of the essence. With many cities and states under shutdown to stop the spread of the disease, businesses are laying off millions of workers — an unprecedented collapse in employment:
To call the bill [now law] a “stimulus” is a little misleading because this is more about direct economic relief. Traditional economic stimulus is done in
response to a shortfall of aggregate demand — a situation where people are cutting consumption, usually in response to a financial crisis, and the government wants to get them spending again. But now the economy is being forcibly ground to a halt by necessary pandemic-fighting measures. People can do without restaurant trips and new TV sets for a couple of months, but they still owe rent, debt payments and other bills.
Businesses could simply shutter their doors and take a pause for a while, but they also owe monthly payments, so they’re in danger of bankruptcy.
This so-called stimulus is actually a piece of financial restructuring, designed to transfer some of those monthly obligations from households and
businesses to the federal government. That’s good, because the federal government is able to borrow cheaply and can service these obligations more easily.
Households benefit in two ways. First, many middle-class households get a one-time direct cash payment of $1,200 ($2,400 for married couples) plus $500 per child. Second,
unemployment insurance has been vastly (though temporarily) expanded — laid-off workers will receive $600 a week for four months, in addition to what they would have otherwise
received. Unemployment insurance has also been extended, just as it was during the last
recession.
This is actually pretty good in terms of the size of the payment — in some ways, more generous than Canada’s relief programme. A family of four with one laid-off worker would get $8,200 over the course of two months on top of normal unemployment insurance. For many people this will be enough to get by. The law also extends this assistance to freelancers and independent contractors.
But for people in big cities — where the epidemic is hitting the hardest — it may still fall short. If the aforementioned family of four lives in New York City and pays median rent (more than $3,400 a month) for a two-bedroom apartment, that family will have only $800 left per month from the stimulus — on top of normal unemployment insurance — to pay for utilities, debt service and necessities such as food.
—Bloomberg
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion