The U.S. government could resort to a wartime and post-disaster measure to raise money for millions of Americans and small businesses that suffer economic harm as a result of the new coronavirus outbreak.
The Treasury could issue coronavirus bonds, much like it issued Liberty Bonds after World War I, the September 11th terror attacks and Build America Bonds following the 2008 financial crisis, according to Robert Wolf, founder of the global-consultancy firm 32 Advisors and a former Obama White House economic adviser.
“I think that for many different sides this would be a win-win for the nation,” Wolf told FOX Business. “There's a lot of different ways you can use this money.”
The COVID-19 outbreak has infected 4,110 people in the U.S. while killing 71, according to the latest data provided by Johns Hopkins University & Medicine. The fast-spreading nature of the virus has caused the cancelation of travel plans and sporting events and the shuttering of businesses and restaurants across the country, resulting in employee furloughs and layoffs.
Wolf said the proceeds raised from the bond sale could be given directly to recently unemployed or hourly workers, or be used to give low-interest loans or grants to small businesses.
On the flip side, the bonds would give investors who are too nervous to invest in stocks a chance to earn more than the less than 1 percent offered by current bond rates.
“I think most importantly you would see so many people across the country of all walks of life want to participate in this,” Wolf said. “Whether this is what they buy for their kids for college or whether they buy for retirement or just for the good of the community or because they want to go into a safe haven.”
Wolf suggested the Treasury could issue on year bonds, or offer several denominations out to 10 years.
“Certainly I would say that this type of thing is much better than a payroll tax, where literally we're dribbling out money, over every two-week period, that is spread throughout the country as opposed to those who were at least most in need,” Wolf said.