6 ms·

Such a simple and reassuring answer, why can’t we have that in America?

opportune 7y ago
Just to play devils advocate... this has the potential to cause an absolutely massive liquidity crunch. All debt is an asset - all payments on debt are a positive number in some investment portfolio/banks/etc balance sheets (eg a bond). If everybody stopped paying debts and rent, the financial industry could crash overnight as suddenly nobody has the cash flow to pay each other any more. And that would trickle down immediately - not only as banks and property management groups go out of business, but in property tax revenues, pensions, people on fixed incomes, and then all the second and third order effects: insurance and reinsurance, massive market panics, etc. It sounds nice on an individual basis but the risk is insanely huge
- ksec 7y ago
  I agree but I see this as a problem we could fix using financial tools. Rather than letting thousands if not millions of small business and jobs completely gone.
  - opportune 7y ago
    Or face a total financial system meltdown if the fix is poorly implemented. I think the simplest solution is for the fed/government to simply give everybody cash, since the root of the problem is that a lot of people have temporarily lost their incomes due to their jobs being essentially banned in response to the pandemic (eg a lot of people in retail outside of supermarkets/food). Anything that involves nonpayment is extremely risky
    - ksec 7y ago
      That is actually a great argument. Directly injecting liquidity to citizens. At roughly 200M adults in the US, $2000 per adults would be $400B. Except $2000 doesn't really last long.....
      - deleted 7y ago
        [deleted]
      - devdas 7y ago
        Cut the military budget, you can save a lot of money that way.
- jhayward 7y ago
  Where do you see Macron saying payments are stopping? Why would we assume France would do the dumbest, most damaging thing possible rather than something easy and healthy, like monetizing a fiscal stimulus of direct payments?

Just to play devils advocate... this has the potential to cause an absolutely massive liquidity crunch. All debt is an asset - all payments on debt are a positive number in some investment portfolio/banks/etc balance sheets (eg a bond). If everybody stopped paying debts and rent, the financial industry could crash overnight as suddenly nobody has the cash flow to pay each other any more. And that would trickle down immediately - not only as banks and property management groups go out of business, but in property tax revenues, pensions, people on fixed incomes, and then all the second and third order effects: insurance and reinsurance, massive market panics, etc. It sounds nice on an individual basis but the risk is insanely huge

ksec 7y ago
I agree but I see this as a problem we could fix using financial tools. Rather than letting thousands if not millions of small business and jobs completely gone.
- opportune 7y ago
  Or face a total financial system meltdown if the fix is poorly implemented. I think the simplest solution is for the fed/government to simply give everybody cash, since the root of the problem is that a lot of people have temporarily lost their incomes due to their jobs being essentially banned in response to the pandemic (eg a lot of people in retail outside of supermarkets/food). Anything that involves nonpayment is extremely risky
  - ksec 7y ago
    That is actually a great argument. Directly injecting liquidity to citizens. At roughly 200M adults in the US, $2000 per adults would be $400B. Except $2000 doesn't really last long.....
    - deleted 7y ago
      [deleted]
    - devdas 7y ago
      Cut the military budget, you can save a lot of money that way.
jhayward 7y ago
Where do you see Macron saying payments are stopping? Why would we assume France would do the dumbest, most damaging thing possible rather than something easy and healthy, like monetizing a fiscal stimulus of direct payments?