What happens if the economy truly tanks?

The government has taken steps to shore up most businesses. But it is becoming clear that the current plans may not be ambitious enough. Governments across the globe may need to be more radical if the commercial world is going to be able to handle the coronavirus crisis, while also ensuring tolerable income conditions for all workers, employees and the self-employed. If things get much worse, they may have to break out of their orthodoxies and start engaging with new, contrarian possibilities, such as more extensive public ownership and considerably higher taxes. These ideas will not, at first sight, be popular but maybe now is the time to debate and discuss these new solutions.

Perhaps the coronavirus outbreak will recede soon, having given everyone a very unpleasant scare, leaving the economy relatively intact. More probably, this will not happen. What should we do then, if the economy contracts over several months – maybe longer – and more and more businesses become unviable? What can be done if tens of millions of people are then on the state payroll, threatening any reasonable chance of recovery unless even more drastic action is taken than we have seen so far?

This is not the first time that the world has been hit by economic catastrophe.