Fiscal spending will give more money to people.

After gyrating up and down during October of 1929 the Dow Jones Industrial Average (DJIA) took three years to reach bottom in 1932, wrote Prof VA Nageswaran. This was during the Great Depression. With the coronavirus shutting down major economies of the world there is great worry that the world could face a severe recession like the Great Depression unless coordinated massive stimulus measures are taken by governments. The biggest danger is not the "overall global debt/gross domestic product (GDP) ratio of 322%" but that, "From 2007's final quarter to 2019's third quarter, the outstandings of US corporate bonds plummeted from $1.882 trillion to $563 billion for Aaa/Aa, while advancing from $1.313 trillion to $2.652 trillion for single A and from $997 billion to $2.714 trillion for Baa," wrote Nageswaran. Which means more money in junk bonds because they pay higher interest. Nageswaran has been warning against bubbles in stocks and bonds caused by low interest rates and quantitative easing by major central banks in the world. They have done it again. The Federal Reserve in the US announced an emergency cut in its funds rate by 50 basis points on 3 March. This alarmed markets so that the DJIA closed 2.9% down on the day. Then, in another emergency move on Sunday 15 March the Fed slashed funds rate by 100 basis points, taking it to zero lower bound once again, and announcing a $700 billion quantitative easing program. This spooked markets again so that the S&P 500 closed down nearly 12% and the DJIA fell a record 12.9%. In an emergency move, the Bank of England cut its interest rate by 50 basis points to 0.25%. Markets were not impressed because lowering the cost of borrowing is of no use because companies will not invest in new business when there is no demand, as people are restricted by lockdowns, and banks will not lend to small businesses which are not allowed to open. Everything changed yesterday. President Donald Trump wants to send checks to families in the US and wants the Congress to sanction "$200 billion-plus of payments to Americans by early April". The Trump administration also wants a stimulus package of $850 billion. "Roughly $500 billion of this would be tied to a payroll tax cut, while $250 billion would come in the form of Small Business Administration loans and another $58 billion would be directed to the airline industry, among other measures." The British government announced a stimulus package worth 330 billion pounds, equal to 15% of GDP according to the Chancellor of the Exchequer Rishi Sunak. This will help small businesses and individuals to survive while they are unable earn. The Dow Jones reacted by jumping over 1,000 points. The Reserve Bank of India (RBI) did not cut interest rate at its last meeting because the rupee may tank if carry trade comes to a halt and our fiscal deficit is already among the highest among emerging market countries. We can only wash our hands and pray.