How Bailout Backlash Could Lead to a Depression

Neil Irwin: “The United States economy is in free fall, with tens of millions of people unemployed and countless businesses at risk of collapse. Congress has already allocated nearly $3 trillion to contain the crisis, and it is widely understood that it will need to do more. Yet with stunning speed, the political conversation has pivoted from whatever-it-takes determination toward a different feeling: outrage.”

“Increasingly, lawmakers, media coverage and ordinary voters are focused not on preventing a potential depression, but on litigating which recipients of federal rescue are morally worthy and which are not.”

“In effect, a scramble is underway to define who counts as deserving of a piece of the multi-trillion dollar federal rescues. The risk is that this fuels a sense of scarcity, of zero-sum jockeying. It has the potential to limit the government’s response and suspend help to affected individuals, businesses and governments before the crisis is anywhere close to ending.”