So far the federal government's response to the coronavirus has been lackluster and President Trump's speech on Wednesday did little to help.

In order to shield the US economy, the government needs to do two basic things.

First, escalate the scale of the public health response drastically.

Two, give cash directly to Americans to blunt the impact of lost work and declining economic activity.

Neil Dutta is head of economics at Renaissance Macro Research.

This is an opinion column. The thoughts expressed are those of the author.

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With the US economy on edge as the fallout from the coronavirus spreads, lawmakers are mulling additional measures to stimulate the economy and cushion the blow, providing a bridge over troubled waters for households and businesses.

However, in these current circumstances, some policies are more useful than others. Importantly, while economic stimulus will help, the most pressing issue is knowing how far the virus has spread in the population and bringing the spread under control.

After addressing the public health concerns the government needs to look beyond tax cuts and do something simple to boost the US economy: hand people money.

This is a public health crisis first

President Donald Trump attempted to calm the nation on Wednesday night by announcing a series of measures designed to combat the coronavirus outbreak and its economic consequences. To understand what went wrong with Trump's address, it is worth recognizing the causality of things.

This is a public health crisis first, an economic problem second, and a financial market problem third. Solve the first and you can deal with the other two. Increased testing is needed to understand the scope of the problem.

Second, there was not much meat on the bones of Trump's speech with respect to the economic plans. He announced executive actions like loans to small businesses and tax payment deferments, but what Trump really needs is Congress.

In that regard, the case for stimulus is strong.

How the government can help people: give them money

Given the disruptions to businesses, financial institutions, and workers resulting from attempts to control the spread of the virus, many consumers are likely to face credit constraints soon. The government can use policy to, in effect, borrow on their behalf.

Moreover, long-term interest rates are low and have been falling, despite increased government spending. Recent research finds that the beneficial effects of government stimulus is higher when interest rates are at the zero-lower bound, a condition the market is expecting relatively soon.

One of the most basic concepts in macroeconomics is that changes in government spending and taxes have multiplier or chain reaction effects. So, if the government spends an additional dollar building roads, it provides income to construction workers. If the workers spend that income, it becomes income for people from whom they buy products or services, and so on down the line.

Generally speaking, direct spending by the government tends to provide the most bang for the buck, though it drawback is the length of time it takes for the money to move out the door. While a temporary payroll tax cut — that is reducing the amount of taxes for programs like Medicare or Social Security pulled out of workers — has been floated by the administration, most research shows direct transfer payments to households would be more useful.

The "drip, drip, drip" nature of a payroll tax cut spreads the benefit over too long a period of time. Moreover, a payroll tax cut is useful when we are staring at a plain vanilla recession when the goal is to encourage businesses to hire workers and workers to spend more money. However, this is not what the economy needs now. We don't want more people on the job; we want those who are sick to stay off the job; this is why direct transfer payments make more sense than cuts to payroll taxes.

In a perfect world, we would see direct cash payments to households and aid to state and local governments as they represent the frontlines of the health crisis.

Finally, it should go without saying, but just because fiscal policymakers are likely to step up to the plate, the Federal Reserve is not off the hook. While the central bank announced a large set of asset purchases starting Thursday, they should also cut the overnight federal funds rate rates to zero and promise to do more, especially given the stresses in corporate credit markets.

Neil Dutta is head of economics at Renaissance Macro Research. He analyzes global economic and cross-asset market themes, providing leading-edge forecasts for institutional clients.