The economic fallout from the COVID-19 outbreak now feels like a pandemic, and the economy just took another kick in its face as Russia and Saudi Arabia just went into a deep oil price war. The combined result is an economy that is going to feel like it’s entering into a recession whether or not one is formally declared. Long-term U.S. Treasury yields just hit all-time lows, and the price drop of gasoline may be so rapid that the bogeyman of deflation is coming back into play. The stock market went from all-time highs as recently as February into correction mode (−10%) and is now flirting with the 20% drop that would constitute a bear market.

The U.S. Federal Reserve (Fed) issued an emergency interest rate cut just last week, and the markets hardly even gave it any notice. One of the biggest concerns beyond actually catching the coronavirus is that there may be somewhat limited tools that the governments and central banks actually can take to keep their economies from falling back into a recession. Central banks already have cut rates so low that Europe and Japan now have negative interest rates, and there are fears that the major slowing or shut-in that was seen in China could occur in the United States and elsewhere.

The writing on the wall is now loud and clear that economic risks are rising. Whether it is the U.S. government, the Fed, the Treasury, or other entities, there are at least some tools that could be used to offset some fears of a pandemic and some of the impact of the oil and commodities markets.

The number of coronavirus has increased in South Korea, Japan, Iran, Italy, other parts of the Middle East and elsewhere. The United States has started to see reports of more widespread outbreaks, and there are concerns that a very large portion of the U.S. workforce will have to work from home. Now throw in the added pressure that could come from potential school closures and factories and offices shutting down entirely. The Centers for Disease Control and Prevention (CDC) previously warned that a more widespread outbreak was “when rather than if.”

24/7 Wall St. wanted to offer its readers a list of tools and strategies that the government and agencies could take to help minimize the economic impact. The Federal Open Market Committee (FOMC) already issued an emergency interest rate cut, and the markets are pricing in even more rate cuts. These may not really work that much. After all, does a lower interest rate make consumers feel more confident they won’t get sick by going out? Will it make businesses start flying their workers to conferences and meetings?

The public should not expect that major economic supportive actions are coming just because the stock market is down. The larger issue is whether the lack of retail demand and the falling gas and oil prices would help trigger a deflationary and contracting economy. Still, the U.S. Federal Reserve and central banks from China, Japan, Korea, Europe and elsewhere should at least be considering what sort of other non-traditional accommodative actions they can take and are willing to take beyond cutting interest rates and adding extra liquidity.

Lessons of the Great Recession, terrorist attacks, natural disasters and other events in the past may hold some lessons for what central banks and the U.S. government could do beyond traditional interest rate cuts to stimulate the economy, even if the coronavirus becomes much more widespread and the oil price war lingers. The public should also understand that some of these actions may not exactly be legal or constitutional, but that doesn’t mean they are criminal acts. In times of need, particularly in a life-threatening crisis combined with an economic crisis, the strategies in the playbooks of the past just may not be enough to avoid deflation, a recession or major layoffs.

1. Loan or Tax Relief

During times of natural disasters like hurricanes and storms, the private sector on its own has allowed for loan relief. The government can backstop these efforts so that companies do not have to feel the full brunt of them, and that is not just the U.S. government. There had been reports that the White House was considering some tax assistance for the battered airline industry just last week.

The U.S. Treasury has allowed for longer delays in tax filings and has delayed some payment dates and other penalties for those people who have been in areas affected by natural disasters. The U.S. tax filing date of April 15 is just a month and a half away, and if the coronavirus does expand into an outbreak around multiple geographies in the United States, the Treasury could allow for delays.

It seems hard to imagine that the United States would again cut taxes in 2020. How that would help in a viral outbreak may be questionable, but cutting taxes is a tool that leaves additional funds in the public’s bank accounts.

2. Using Helicopter Money

Simply printing money and getting it into the system has been considered a classic stimulus tool. Some members of Congress already have shown ignorance over who Ben Bernanke is, but there was a time when the chair of the Fed, who took the role after Alan Greenspan, was called “Helicopter Ben.” His use of the term signaled a potential tool to fight deflation and to avoid when systemic breaks occur.

The term “helicopter money” actually is credited to economist Milton Friedman from decades earlier. The implication is effectively dropping money out of helicopters to the public and institutions, but that could be seen via many types of efforts.

3. Will the Fed (or Social Security) Just Start Buying Stocks?

The Fed’s balance sheet had worked itself down to about $3.75 billion in August of 2019, after peaking above $4.5 trillion back in 2014 and 2015. The size of that balance sheet has come back up to nearly $4.2 trillion in February. Rather than buying Treasuries that already have very low yields, the Fed could move beyond government agencies and mortgage-backed securities. The Fed could be more creative with asset purchases.

Whether the Fed itself would jump into the stock market remains to be seen. It could start buying corporate debt, perhaps even riskier debt, and allowing some companies to have less than bankruptcy terms. Central banks in Europe have bought corporate bonds to the point that it’s not easy to buy much debt in Europe now. The Bank of Japan and central banks in Switzerland and Israel also have been buyers of equities in the past. There has been widespread talk about the so-called Plunge Protection Team that was pointing to a “mystery buyer of stocks” during times of market panic.

As for the government itself, there have been calls in years past that the money put into Social Security should have at least some equity market allocations. With long-term Treasuries now at record low yields, the Social Security funds have to grow somehow.

While most nations do not directly own stocks for their treasuries, there are massive sovereign wealth funds that exist for the supposed benefit of future generations. Abu Dhabi, China, Hong Kong, Kuwait and Norway have nearly $4 trillion in combined assets in their sovereign wealth funds alone. Dozens of other countries and entities also have billions of dollars in sovereign wealth funds. It’s obvious that not all the available funds could be or should be targeted toward stocks, but maybe some should be considered if needed.

4. Writing Checks or Making Loans to Affected Industries

The world already has seen bailouts occur in the banking and financial sectors in the Great Recession. The government also bailed out the U.S. auto industry. After the 2001 (9/11) terror attacks, the government propped up the airline industry with billions of dollars worth of “gifts” that were reported to have gone way down the line beyond just air carriers.

The airline industry’s woes of the 737 Max fleet grounding in 2019 were followed by the impact of the coronavirus in 2020, with that situation now going from bad to worse as the coronavirus spreads. Flights into and out of China were canceled, and now the airlines have begun cutting domestic flights, after cutting many international flights due to low demand. This comes with a direct spillover into hotels, restaurants and drinking establishments and beyond, as travel companies already have warned that travel plans and conferences are being cut while existing reservation cancellations are on the rise.

There is also a means of saving jobs here. As airlines have cut more routes or lowered their numbers of flights, that translates to a lower need for as many pilots, flight crews and maintenance and other workers. According to the U.S. Department of Transportation’s statistics, there were almost 600,000 full-time workers and almost 119,000 part-time workers for the major airlines alone.

Throwing government money toward hotel chains, restaurants and bars may seem odd. That said, the Bureau of Labor Statistics (BLS) data shows that there are nearly 13.9 million non-seasonally-adjusted workers tied solely to the “accommodation and food services” industries. About 2 million are tied to accommodation, with about 11.9 million people tied to the “food services and drinking places.” Lower spending on vacations and business trips means less money being spent on eating out and drinking away from home. Imagine how bad the travel industry will feel it if the summer rush is shortened because of extended school years. Many establishments simply may not have the worker availability even to open their doors, let alone keep the doors open due to lower spending.

5. Creating a Backstop for the Retail Industry

The calculation for gross domestic product (GDP) in the United States is close to 70% tied to consumer spending activities. That means that the retail trade segment must be kept alive for the economy to grow. That segment was shown in BLS data to employ more than 15.5 million workers as of January 2020.

It seems hard to imagine that the government would just write stimulus checks or offer credit to owners in retail. That said, if businesses are deemed to have been healthy prior to the coronavirus, the government or Federal Reserve could partner with banks or act “somewhat independently” to expand credit lines, offer emergency financing and allow for certain exceptions or delays on pending payments coming due.

Retail already has suffered from the ongoing e-commerce trends every year for the past two decades against the main brick-and-mortar retailers. In an effort to prevent retail shop owners of all sorts from closing down and laying off workers, incentives could be offered and checks could be written, if needed. Whether it was the Treasury or the Fed that wrote the checks might not matter. After all, we already have noted that some of these efforts might not exactly be legal or constitutional.

6. Mandated Purchases of Supplies and Commodities

The U.S. government, and in some cases states and local governments, have special powers or could enact certain powers during times of emergencies. Whether it is using the Federal Emergency Management Agency (FEMA) or activating the reserves in a natural disaster, the government’s health agencies can be ordered to begin purchasing many items. If a declaration of a National Emergency by the president and Congress is made, rather than using special powers to “borrow” or seize assets that might help the public well-being, the government could make mass purchases from companies that make canned and dried food, clothing, medicines, facial masks, sanitation and other products that would be deemed to support a national stockpile of goods.

Also under the special powers, particularly if it pertained to fighting the bogeyman of deflation, the government could begin purchasing certain commodities. Rather than using current plans to unload some of the oil held in the Strategic Petroleum Reserves, the government could try to buy more oil at cheap prices. Low oil and gasoline prices can trigger deflationary pressure. Would the government also decide to start creating a stockpile of other items? Perhaps buying copper and metals, or further on down the commodity chain.

Before taking all these efforts to heart as an all-or-none effort, it would probably be considered ludicrous to assume that all these efforts would be made at once. Governments are known for often being slow and inefficient, but there are at least some blueprints that can be used to keep the economy from cracking up and to help prevent mass layoffs from businesses that are feeling pain of a pandemic scare. If the COVID-19 outbreak or the Russia-Saudi oil price war gets worse, there is at least a partial list of efforts that can be taken to support the economy.

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