See above. There is no moral hazard or adverse selection problem with countries borrowing because of the Covid-19 virus, so it is important to support the weakest and help them help themselves.

In effect, we need to pause economic time until the virus passes. Extending credit to firms and workers helps to some extent but is likely to cause problems in the future when they have to cope with severe debt overhangs. Better that the whole society takes the hit now by making cash transfers funded by increasing public debt. Interest rates are very low by historical standards so debt servicing costs are minimal, and markets still appear willing to lend to the UK government. The UK budget deficit rose in excess of 20% of GDP in both World War I and II, leading to large spikes in debt, but which we were able to pay down in subsequent years through a combination of GDP growth, inflation and (some) primary surpluses. I would hence like to see much larger scale interventions than have been agreed so far. What’s the point of having a nation state with an ability to borrow large amounts of money cheaply if we don’t use that ability when there is a crisis of this type?