“If we don’t do something like this six-part plan, we’re going to have a serious financial emergency on top of the public health emergency,” CNBC’s Jim Cramer said.
Jim Cramer on Thursday said “these are not normal times,” calling on lawmakers to learn the lessons of the financial crisis and take action to avoid a pending crisis.
The CNBC host broke down what his idea of a “massive federal intervention” would look like to help health officials get a grip on the fast-spreading coronavirus outbreak. Earlier, the Senate canceled its scheduled recess next week as lawmakers on Capitol Hill debated an economic response plan.
The “Mad Money” host insisted that bold action now can prevent a worst-case scenario in the U.S. economy, saying “the only way to beat COVID-19 I believe is to risk a recession.”
“We need to slow the spread of this virus and that means rules against gathering, rules that make people stay home, rules that are very bad for business,” Cramer said. “That’s why we need a massive federal intervention to keep businesses afloat.”
Cramer recommended that lawmakers institute a “wholesale postponement of federal taxation,” let the U.S. Department of Treasury borrow $500 billion at low interest rates to fund the government and recoup back taxes after the COVID-19 outbreak is solved.
To prevent small businesses from going bankrupt, he suggested the government offer interest free loans to establishments that maintain their head count and offer paid sick leave through the downturn, he said.
Officials should institute government backstops and guarantees on revolving credit to reduce pressure on the banks, limiting the chances of a financial crisis, Cramer said.
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