Most states also have liquidity constrains due to balanced budget amendments that prohibit their governments from deliberately running a deficit even in tough economic times, which compels them to raise taxes or cut spending during recessions in a way that undermined government stimulus efforts. The government can also improve liquidity through the tax system by allowing businesses and individuals to claim some 2020 tax incentives on their 2019 tax returns, delaying the 2019 tax filing deadline, and postponing the collection of both employer-side payroll taxes and quarterly tax payments until the coronavirus outbreak has been contained. Borrowers should be allowed to delay payment on federal student loans and federally insured or guaranteed mortgages for six months without accruing additional interest costs, as proposed by Sen. Indeed, the biggest problem for many people and businesses is the disruption of their cashflows during a prolonged shutdown rather than weaknesses in their underlying finances. Offering low- or no-interest loans would enable otherwise financially healthy businesses to continue meeting their obligations for the duration of the crisis, preventing unnecessary defaults that destroy otherwise productive financial arrangements and create economic hardships that linger well after the pandemic has been contained. Policymakers must adopt a combination of thoughtful public health and macroeconomic policy measures that will limit the damage caused by both this and future recessions. economy will contract for at least some period of time in 2020. Quarantines, social distancing, and other proactive measures that are necessary to contain the pandemic are already limiting commerce and disrupting global supply chains, essentially ensuring that the U.S. The outbreak of COVID-19, caused by the novel coronavirus, has created a global market downturn and put the United States on track for its first recession since the 2008 financial crisis. (Photo by Michael Nagle/Xinhua via Getty) (Xinhua/Michael Nagle via Getty Images) Xinhua News Agency/Getty Images The Nasdaq Composite Index was down 970.28 points, or 12.32 percent, to 6,904.59. The Dow Jones Industrial Average cratered 2,997.10 points, or 12.93 percent, to 20,188.52. equities plunged on Monday with the Dow closing down about 3,000 points, as fresh stimulus measures from the Federal Reserve failed to calm markets amid intensifying virus fears. NEW YORK, Ma- Traders work at the New York Stock Exchange in New York, the United.
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