Progressive, including Representative Alexandria Ocasio-Cortez from New Yorkhave called for moratoriums on rent and other financial obligations. And even conservatives, despite concerns about government initiatives that are already more expensive than those in the 2008/09 financial crisis, have said that this is a case where it makes sense to grant grants – not just loans – to individuals and businesses.
Michael R. Strain, director of economic policy studies at the right-wing American Enterprise Institute, said that companies may be able to afford to take on additional debt to sustain them through a period of lost earnings, but that most small businesses, particularly in the service sector could not.
“A manufacturing company could return to an order backlog, but if you are a service provider, you have just lost that revenue,” he said. “People won’t go out to eat six times as often when it’s over.”
When companies face an enormous debt burden to survive the crisis, Strain said: “This situation leads to a much longer downturn.”
It can be challenging for workers to survive more than a few weeks without pay. The 11-year economic expansion led to record unemployment, but contributed less to ensuring financial stability. The Federal Reserve reported last year that four in ten Americans would struggle to meet unexpected $ 400 costs.
34-year-old Cori Aitken lost a job as a sales representative at Temescal Brewing, a small brewery in Oakland, California, and another job bar. Now she wants to cut her $ 1,900 monthly spending budget, which includes about $ 1,000 in rent and $ 300 for utilities, plus a phone bill, car insurance, and loan payments.