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Needed: A finance agency to handle the financial meltdown from the coronavirus

Il Congresso USA dovrebbe creare immediatamente un’Agenzia federale per affrontare il nodo del finanziamento della risposta all’emergenza Covid-19. Dal “The Boston Globe”.

The first wave of Covid-19 costs is upon us. Public funds are now required to pay for the production of protective suits, masks, and testing kits; additional hospital beds, supplies, respirators, oxygen tanks, and intensive care units; the hiring and training of additional health care workers and the funding of emergency research and development. The $8.3 billion in emergency funding passed by Congress and signed by the president last week is the necessary first installment.

A second wave of costs will follow. It will be much larger and, for many, it will be lethal in a different way. The pandemic will bring a collapse of air travel and threats of bankruptcy to many businesses, large and small, whose customers will avoid crowds. Services of all kinds — including retail stores and restaurants — will be hard hit. Workers in those sectors will lose pay and in many cases their jobs. Debtors and taxpayers will have trouble making payments, especially if major cities go on lock-down, as all of Italy did on Wednesday, shuttering all stores except supermarkets and pharmacies.

The length and depth of this meltdown may depend on the course of the epidemic over the summer. Not every consequence can be foreseen. The situation is moving fast, and there is an immediate need for a federal agency to manage resource allocation and the financing of the response.

To meet this need, Congress should create a time-limited government corporation, a Health Finance Corporation. It should be modeled on the Reconstruction Finance Corporation, created during the Depression and used to support the New Deal and the World War II mobilization.

The Health Finance Corporation should be a wholly-owned government corporation, similar to the Commodity Credit Corporation, the Export-Import Bank, and the Pension Benefit Guaranty Corporation. Temporary and subject to recharter by Congress after a few years, it would resemble the Resolution Trust Corporation, which dealt with failed savings and loan institutions between 1989 and 1995.

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