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Denmark's Idea Could Help the World Avoid a Great Depression
“We are freezing the economy.”
https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/
While the White House and lawmakers haggle over the terms of an emergency economic-stabilization package, Denmark has gone big—very, very big—to defeat the unprecedented challenge of the coronavirus.
This week, the Danish government told private companies hit by the effects of the pandemic that it would pay 75 percent of their employees’ salaries to avoid mass layoffs. The plan could require the government to spend as much as 13 percent of the national economy in three months. That is roughly the equivalent of a $2.5 trillion stimulus in the United States spread out over just 13 weeks. Like I said: very, very big.
This response might strike some as a catastrophically ruinous overreaction. Perhaps for Denmark, it will be. But we are at a fragile moment in American history. The U.S. faces the sharpest economic downturn in a century, and statistics that seem impossibly pessimistic one moment look positively optimistic hours later. In weeks—even days—Denmark’s aggressive response could be a blueprint for how the world can avoid another Great Depression.
To find out more, I corresponded with Flemming Larsen, a professor at the Center for Labor Market Research at Denmark’s Aalborg University, over two days of emails and an hour-long Skype call. The following interview blends those conversations, which have been edited for length and clarity.
https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/
While the White House and lawmakers haggle over the terms of an emergency economic-stabilization package, Denmark has gone big—very, very big—to defeat the unprecedented challenge of the coronavirus.
This week, the Danish government told private companies hit by the effects of the pandemic that it would pay 75 percent of their employees’ salaries to avoid mass layoffs. The plan could require the government to spend as much as 13 percent of the national economy in three months. That is roughly the equivalent of a $2.5 trillion stimulus in the United States spread out over just 13 weeks. Like I said: very, very big.
This response might strike some as a catastrophically ruinous overreaction. Perhaps for Denmark, it will be. But we are at a fragile moment in American history. The U.S. faces the sharpest economic downturn in a century, and statistics that seem impossibly pessimistic one moment look positively optimistic hours later. In weeks—even days—Denmark’s aggressive response could be a blueprint for how the world can avoid another Great Depression.
To find out more, I corresponded with Flemming Larsen, a professor at the Center for Labor Market Research at Denmark’s Aalborg University, over two days of emails and an hour-long Skype call. The following interview blends those conversations, which have been edited for length and clarity.
Lots of good stuff at the Atlantic. I decided to start paying for it today so I could read these articles and encourage more writing like this.
4 replies
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America always does this for wealthy job creators to buy more stock on the cheap. 
Would that it were for workers 
