With the U.S. health crisis showing no signs of abating, and recognition growing that even the historic $2 trillion bailout won’t be enough to keep our economy on ice while keeping people whole, ideas are piling up for what to include in future relief packages.
Proposals are moving far beyond traditional benefit spending to include big new structural innovations. Those include ideas like a National Pandemic Production and Financing Board that could take equity stakes in health supply companies to help ramp up and produce medical equipment, or a Health Finance Corporation that could fund the crisis response by raising money in debt markets. Versions of these ideas have been championed on the left and the right, and by politicians from Bernie Sanders to Marco Rubio.
This type of agency, which uses public dollars to make big economic investments designed to help resuscitate the U.S. economy and produce needed supplies, might seem like a dramatic new emergency measure, and indeed it might be—but it wouldn’t be unprecedented. A common denominator of these proposals is they have a big, successful but controversial antecedent: the Reconstruction Finance Corporation, a government body that helped the U.S. fight the Great Depression and then went on to fund the massive efforts required to fight World War II and the Korean War. Continue reading.