COVID-19 stimulus packages are here, and they are inevitable, The question is not "if" it is "how"? Should subsidies be given to people forced to live in quarantine, to businesses now forbidden to operate, or to big corporations facing bankruptcy? Libertarian principles can help choose the least wrong solution.
As a libertarian, I think there is a case to be made for a People Bailout or Quantitative Easing (QE), also called helicopter money. Economically, it interferes less with market forces. Ethically, it recognizes that citizens forced in quarantine whose property rights have been violated by government decree have a legitimate case for compensation. Socially, it eliminates "favoritism" for special interest groups and creates fewer divisions among the citizens at the front line of this national emergency.
Least interference in the markets
Libertarians believe that the government is unable to pick winners and losers, especially in a time of high uncertainty in the middle of a pandemic. Redistribution of wealth by the government too frequently results in favoritism, crowning capitalism, special interests, and in some cases, downright corruption.
Regardless of the amount of money received today, some companies will probably not fare well in the current crisis. The enormous changes in our lives lead us to shop and consume differently. It is conceivable that even after the crisis, some products will not go back to their past popularity. Still, at the same time, new businesses will offer new products in high demand.
Individuals know better than the government what they need and how they want to spend their income. Giving a subsidy to the people is the least interfering policy to the market, and that's one reason some libertarians support this idea.
It is essential to keep the government accountable for abruptly disturbing much of economic activity. If the government is allowed to take away jobs, businesses, and livelihoods without compensating individuals, it will set a dangerous precedent.
The public sector is the only sector of the economy that didn't suffer job loss and income reduction. Financial compensation will not only help people, but it will also establish rules for future interventions. If the government isn't compiled to compensate its citizens and keeps its bureaucrats insulated from the economic consequences of lockdown, the probability for this kind of policy to re-emerge in the future becomes much higher.
As citizens, we all know the price of confinement; it is time for the government to feel the cost to ensure that this lockdown will stay the exception and does not become a cheap policy tool for our politicians.
Less favoritism, more clarity
If we let the government choose which industries or sectors to subsidized, it is clear that interest groups with talented lobbyists will get the best share of it. A people bailout is simple, transparent, and less open to possible corruption.
It also helps solve one of the worst scandals in this crisis, the status of the self-employed, a quarter of the workforce. Self-employed in Israel is not entitled to withdraw money from their social security account nor get unemployment insurance, although they worked very hard to contribute to both. Those people didn't choose to stop working; they stayed home to fight a national emergency.
A people bailout creates less favoritism, alleviates citizen suffering, and keeps the government accountable. It is not a good policy, but it is the least bad during this unimaginable crisis.