MSU RED: Small-Business COVID-19 Survival Guide

May 11, 2020

“The Great Depression happened over four years as a slower decay,” said Kishore Kulkarni, professor of economics at MSU Denver. “This has been four weeks – we’ve fallen off a cliff.”

Though federal aid is necessary to buoy businesses in a crisis, Kulkarni said, the federal response has been patchwork and the situation requires a long-term fix. The two small-business relief bills total nearly $3 trillion, compared with the pre-coronavirus government annual expenditure of $4 trillion, he said. The explosion in deficit spending drives up debt and could trigger a rapid onset of inflation.

“It’s only effective in the short run,” he said. “The challenge is that we don’t know how long the virus will be around, and we can’t keep just doing this; there are limitations to the tools we have at our disposal."