It would be wonderful to say that there is a playbook for the current situation where the coronavirus is destroying the global economy. The raging bull market and 11-year long economic recovery has plunged into a bear market and a recession in the period of just one month. Whether or not a formal recession occurs in the classical sense of two quarters of GDP contraction, the current environment already feels like a recession. To make matters worse, much of the U.S. workforce is being told that they cannot work, whether they or anyone else wants them to or not. The government will have to forget about interest rates and bond buying for a moment. The so-called helicopter money drop is going to have to come into play.

The entire United States labor force is becoming more and more used to the work-from-home until further notice situation. Ever more states are closing their schools, and eating establishments are also being closed entirely or are being forced into take-out only. Simultaneously, food, toilet paper and everything else of importance is being bought up faster than it can possibly be restocked.

This is a situation in which classical monetary policy and traditional economic stimulus is not going to do the job. It doesn’t hurt, but it cannot be the bazooka blast. Quite literally, this time is different. You can thank Ben Bernanke or Milton Friedman for the theory of “helicopter money,” but it’s literally going to take its equivalent to act as a backstop for the U.S. economy and most other economies that are being shut down due to the circulating fears from the coronavirus pandemic.

The first questions are about just how the “helicopter drop” of many billions of dollars is going to work, to whom the money will go to and for how long. How this all gets paid for is another mystery, but with a national emergency declaration, some of this is going to have to simply be made up and imagined along the way.

One of the first things that has to occur is that the president or Congress, or the Federal Reserve or Treasury, will have to make an unprecedented announcement that “all owed bills are hereby delayed for 30 days, with more delays possible” or will have to offer some form of a direct payment to the public that has been affected.

Will it be $1,000 or $2,000 or $3,000? And will it be just one-month or will it extend as long as employees who work in jobs that effectively just became shut-in?

There are millions of workers at retail stores, food services, event services, bars and so on who already have been told or are now at risk of being told that their place of work is closed until further notice. Again, this is unprecedented. And it’s going to take unprecedented action that likely goes against political and fiscal beliefs for a huge portion of the world.

At this time, it remains unclear what action will be made by which branch of the government. It also remains unclear, how certain money payments to the public would be conducted. After all, the cost of living in Los Angeles, Seattle, New York and Chicago is just a lot higher than it is in most cities throughout the middle parts of America.

The government in the United States cannot be expected to take care of everyone all at once, but there is no real precedent to work from here today. If you go back to the 9/11 terror attacks of 2001 and to the financial crisis in 2008 and 2009, there was not a period where states mandated closures across entire states. The air carrier fleets were grounded for a few days, and while the planes were initially empty, they were still moving passengers to and fro.

With the Federal Reserve turning back to its playbook of lowering federal funds effectively back to zero percent and recommitting to Treasury and mortgage-backed securities, it is adding another $700 billion back into the system. Now is the time that the consumer must be given some reprieve. That reprieve is not so that they can go spend money at a store, but so they are able to make ends meet and be able to eat something.

According to the U.S. Department of Labor’s revised January 2020 data, just over 164.6 million people make up the U.S. civilian labor force and 152.27 million who are counted in the nonfarm payrolls. Now we have to look at all of the troubled industries at once. That includes energy jobs, retail and restaurant jobs, jobs around catering and events, construction, airlines and so on. Even autoworkers are suddenly at-risk, and ditto for employees in countless other industries. As of January of 2020, the following jobs were counted as being on the U.S. payrolls, and these are only a portion of the total number of job categories that would suddenly be as at-risk:

• Motor vehicle and parts dealers, 2.064 million
• Furniture and home furnishings stores, 469,700
• Electronics and appliance stores, 473,300
• Building material and garden supply stores, 1.3 million
• Food and beverage stores, 3.09 million
• Health and personal care stores, 1.05 million
• Clothing and clothing accessories stores, 1.29 million
• Sporting goods, hobby, book and music stores, 552,500
• General merchandise stores, 3.04 million
• Real estate and rental and leasing, 2.35 million
• Arts, entertainment, and recreation, 2.49 million
• Accommodation (hotels), 2.09 million
• Food services and drinking places, 12.25 million
• Personal and laundry services, 1.53 million
• Construction of buildings, 1.68 million
• Air transportation, 509,100
• Transit and ground passenger transportation, 507,700

Millions of Americans are now at-risk financially, whether or not they were able to show up for work today. How this is all going to play out remains a mystery. If millions and millions of Americans effectively are banned from working the jobs they have worked for years, how long will it be before mayhem is out on every street in America?

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