Because of the continued onslaught of the novel coronavirus pandemic around the world, many countries and populations have experienced some form of lockdown, curfew, “movement control” or other essential home confinement measures over the past few months. For many businesses, families and individuals, that implies a loss in often much-needed income. Governments or public sectors were often called upon, or took proactive steps to provide some sort of relief measures or economic stimulus packages. The most basic of such relief would often be some sort of handouts to the lowest income groups. The “medium” forms of such packages would then be some wage subsidies to encourage small and medium enterprises to not let go of their employees (who usually comprise the bulk of the working population). The developed countries would of course lay out higher levels of such subsidies, while the developing countries would often have to resort to more symbolic, token subsidies. And the most “lavish” of the stimulus packages would be some incentives to spur the mega-businesses to jumpstart the beleaguered economies
Nevertheless, experience from previous financial crises worldwide has shown that fiscal stimuli and more broadly, governmental “push-priming” of the economy (a combination of public spending, lowering of interest rates, “money-printing” and other public measures), have typically ended up in too much cash accumulating in the market that are then channeled into speculative activities, for example in the stock markets or real estate, thus building up new bubbles that could burst sometime in the future, instead of in real, “productive” activities that could revitalize the economy.
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