No More Bailouts

Ganesh Sitaraman, Lindsay Owens, Adam J. Levitin • June 2020

In the span of twelve short years, America has faced two economic crises with devastating long-term impacts. In the face of the Great Recession of 2008 and the COVID-19 health crisis, Congress scraped together costly ad hoc measures. This crisis approach to policymaking is inefficient at best and malpractice at worst. There is a better way.

In this report, authors Ganesh Sitaraman, Dr. Lindsay Owens, and Adam J. Levitin propose the creation of a standing emergency economic resilience and stabilization program (SEERS) to be deployed in the event of a declared economic emergency. This standing program is not tailored to a specific crisis, but rather serves as an off-the-shelf program to address future economic crises. The SEERS program includes: a restructuring process for large firms, a program that covers payroll and operating expenses for small businesses, financial system infrastructure reform to enable direct government payments to consumers and businesses, and a system of automatic stabilizers. SEERS would allow Congress to respond quickly in a crisis while focusing its attention on the unique causes of each particular downturn.