Quick Thought on the Targeting of a Stimulus

The idea of a cash payment to all adults, in the neighborhood of $1,000, is gaining lots of support as a reaction to the crisis. This may not be an especially effective way to help people.

The reason is that, unlike in past recessions, it will not lead to much of boost in spending, and therefore have little impact on economic activity and employment. In past recessions, the reason most people did not spend is because they didnt have money. If you gave them more money, they would likely spend...