The problem with all of that is that money doesn't grow on trees. It is already (before the pandemic) impossible to tax enough to cover spending. At some point, spending trillions that don't exist will lead to MAJOR long term economic problems. The country won't go bankrupt (it can't since the debt is all in USD) but eventually the value of the dollar will fall precipitously and inflation will get out of control.
It certainly doesn't at the state level. Only the federal government, and only ones that have their own currency like ours, can do this.
Managing that inflation impact is a key point. The specific theory here is that all government spending by itself doesn't cause inflation. The things it's being spent on matter significantly. The spending has to be for stuff that nobody else wants, where it's not competing with others to buy the same stuff. As that competition would cause inflation as others out bid the government and then the government outbid them.
So, government spending couldn't simply buy up services we don't want to allow during a pandemic if others can still buy them too. That would put the government trying to outbid other patrons for dinner tonight. A restaurant would increase the price until one side gave up, massive instant inflation. But, that's not going on here, because we've made it illegal for anyone use to use the restaurant. This makes the restaurant bear the entire cost of not being open. Which is passed on to it's employees and suppliers who can no longer sell to the restaurant.
If the government decided to build a monument to fiat currency in DC that's a huge bonfire only burning hundred dollar bills and nothing else, they could print as many hundred dollar bills to feed this fire as they want with no impact on inflation at all (mostly). All those hundreds aren't buying anything someone else wants. It's mostly, because, if the fire is large enough and requires enough bills, they'll drive up the demand for the raw materials used in the production of the bills. At that point, production of the bills will be competing for resources against someone else and that would cause inflation.
Short term limited spending, even at a huge amount, for resources we've made illegal for anyone else to purchase where other demand has disappeared isn't going to spike inflation. Continuing that spending once other demand is allowed again would.
This is relatively simple with open vs closed. But, clearly harder with a partial open. Is a restaurant 50% open and needs 50% support? What's it 50% of? Yesterday, last week, last month, last year? Were their sales trending up, down, or flat? What level is the spending aiming for? Clearly some issues in details, which probably causes under funding some in the partial scenarios. The alternative is forcing a restaurant to bear the entire cost the same way they would if a competitor opened across town and took all their customers. They'll just go out of business.
