4 ms·

No, there is a one-size-fits-all solution. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3SjhsZ0ztpG5bMzA3WNbVNhU/edit https://docs.google.com/documen

by wegs 7y ago

No, there is a one-size-fits-all solution. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3SjhsZ0ztpG5bMzA3WNbVNhU/edit https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... Stop interest on all loans for 90 days. Defer principal on all loans by 90 days. In 90 days, payments start up as before (and just end 90 days later). Same thing bubbles for all contracts. Leases and rents are free for 90 days. Contracts switch from net 30 to net 120 terms. Etc. You pause the cycle of debt. It works for home mortgages, small businesses, airlines, and almost everyone else. And it avoids the need for a 2 trillion bailout / stimulus package. It allows much more targeted aid at a fraction of the cost. It ain't rocket science.

nostromo 7y ago
This is a recipe for bank failures and a financial crisis.
- wegs 7y ago
  Why? Banks get payments 3 months later. They can also get 0% interest loans from the fed. Why do they fail?
  - 6510 7y ago
    As a whole nothing connects the financial system to the real world. Therefore it cant fail. If the robots take over and humanity goes extinct the financial system will continue to work just fine.
  - imtringued 7y ago
    You just said there should be no stimulus package. Why did you suddenly change your mind and say "We can shift the problem to the banks and then give the banks a stimulus package"? It feels very weird. Why does it matter whether businesses or banks receive the 0% interest loans? It's just a shell game. You didn't solve anything but yet you make your own solution sound better.
- adt2bt 7y ago
  Aren’t they also freed from servicing their debts as well? Why does pausing the debt cycle affect them disproportionately?
  - evandijk70 7y ago
    A portion of their debts are to consumers, in checking and saving accounts. Consumers still need to buy food.
    - wegs 7y ago
      There's a delay, not a stop. Banks can borrow at approximately 0% from the fed right now.
- wegs 7y ago
  As a side note, a down vote shouldn't be the same as "I disagree." If you disagree, please explain why. So far, I've heard no helpful criticisms. Nor have I heard any reason for the down votes -- if I'm doing something wrong, you need to say what it is, or I'll keep doing it. If you want an echo chamber, then by all means bump this down to -50 with no further explanation.
  - JumpCrisscross 7y ago
    I downvoted for the “it ain’t rocket science.” These are difficult problems.
- cosmiccatnap 7y ago
  No, huge tax cuts and cutting regulations that prevent sub prime loans that leave the government incapable of handling a crisis is what causes Banks to fail...
- henrikschroder 7y ago
  If a huge amount of small and large businesses go bankrupt at the same time, stop paying salaries and fire all their employees, making a huge amount of people unemployed, and stop paying rent, making a huge amount of real estate companies go bankrupt, don't you think we're already in the largest financial crisis in human history? If we can pause the economy, preserving all employment contracts, lease agreements, loan agreements, etc, then we're in a much better position for restarting the economy once quarantines and lockdowns can be lifted. But you would rather let everything burn down because existing contracts must be honoured as-is because won't somebody think of the poor bankers?
  - zaroth 7y ago
    So, for starters, total personal monthly income is $1.4 trillion dollars. Most people need their monthly salary to survive. We already need several hundred billion dollars just to shore up unemployment insurance funds, which just pay for a fraction of people’s salary. This has nothing to do with “the poor bankers”. Mostly it had to do with small businesses which make up the backbone of the American economy and which are collapsing at an extremely alarming rate. The government can’t just press a big magical pause button on the DVR. The government can try to pickup some of the bills, or it can loan money out at good rates, or it can fire cash bazookas directly into people’s checking accounts, but even the Fed can’t just print enough money to single handedly keep the entire economy afloat while legally restricting people from doing business. As long as everyone has stopped buying anything and everything discretionary, businesses will be failing and unemployment will skyrocket. Unemployment is a massive drag on GDP because consumer spending is the majority of consumption. GDP of -25% is not just a “tighten the belt and we’re gonna deal with this” type of event. It’s not merely a question of “we have to do this to save lives” because shooting the economy in the gut actually costs lives too. You put people out of work and into financial insolvency, and their general health is very negatively affected, and some of them will die. Look at the opioid crisis, for example.
    - wegs 7y ago
      Most people need that salary to survive due to fixed obligations: mortgages, rents, credit card debt, car leases, etc. That's what we need to pause. Beyond that, you have discretionary spending, which can be cut. And finally, you have essentials: food, medicine, and similar. That's a tiny, tiny fraction. That's what we need to bail out. Yes, there will be long-term consequences of lost production, which will shrink our economy a little bit. But that's fundamentally different from debt defaults, bankruptcies, and evictions. Hitting a pause button avoids all of that.
cmurf 7y ago
Those payments in turn pay for other things. Stopping them, stops everything. Pensions and 401ks, all kinds of commercial paper holding money short term stops, almost all home and commercial property sales stop, companies can't pay their own big bills due to vendors or fulfill order to customers, or can't convert bonds to stocks. It's too simple of an idea. What you are looking for is the time equivalent of printing money. Right now that's magical, it's a deus ex machina event. It's implausible. You have to innovate it, and until then it's a fantasy.
- wegs 7y ago
  > Those payments in turn pay for other things. Stopping them, stops everything. That's correct. We stop everything for 3 months to get rid of the virus. Or almost everything. > almost all home and commercial property sales stop Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. This is already stopped. > What you are looking for is the time equivalent of printing money It is like a time-equivalent of printing money. By virtue of the time-limit, it doesn't have nearly the same inflationary pressure. We need to relieve a short-term financial crunch, and the stimulus, zero interest, etc. all do that, but when the crunch is over, that stuff explodes into inflation. This cleans itself nicely. > It's too simple of an idea What's wrong with simple ideas?
  - bawolff 7y ago
    You're stopping payments for a lot of things. I assume the people on the recieving ends of those payments are still expected to buy food somehow? How? Or are we also expecting that grocery stores provide food on credit that they are not expected to collect on any time soon?
  - mindslight 7y ago
    > Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. You don't actually need to immediately record the deed to buy/sell real estate. I believe this used to be the norm back when remote towns would batch up all their new deeds and send them to the county seat by horse.
imtringued 7y ago
>It allows much more targeted aid at a fraction of the cost. Targeted aid is a code word for bailout.

by wegs 7y ago

nostromo 7y ago

This is a recipe for bank failures and a financial crisis.

wegs 7y ago
Why? Banks get payments 3 months later. They can also get 0% interest loans from the fed. Why do they fail?
- 6510 7y ago
  As a whole nothing connects the financial system to the real world. Therefore it cant fail. If the robots take over and humanity goes extinct the financial system will continue to work just fine.
- imtringued 7y ago
  You just said there should be no stimulus package. Why did you suddenly change your mind and say "We can shift the problem to the banks and then give the banks a stimulus package"? It feels very weird. Why does it matter whether businesses or banks receive the 0% interest loans? It's just a shell game. You didn't solve anything but yet you make your own solution sound better.
adt2bt 7y ago
Aren’t they also freed from servicing their debts as well? Why does pausing the debt cycle affect them disproportionately?
- evandijk70 7y ago
  A portion of their debts are to consumers, in checking and saving accounts. Consumers still need to buy food.
  - wegs 7y ago
    There's a delay, not a stop. Banks can borrow at approximately 0% from the fed right now.
wegs 7y ago
As a side note, a down vote shouldn't be the same as "I disagree." If you disagree, please explain why. So far, I've heard no helpful criticisms. Nor have I heard any reason for the down votes -- if I'm doing something wrong, you need to say what it is, or I'll keep doing it. If you want an echo chamber, then by all means bump this down to -50 with no further explanation.
- JumpCrisscross 7y ago
  I downvoted for the “it ain’t rocket science.” These are difficult problems.
cosmiccatnap 7y ago
No, huge tax cuts and cutting regulations that prevent sub prime loans that leave the government incapable of handling a crisis is what causes Banks to fail...
henrikschroder 7y ago
If a huge amount of small and large businesses go bankrupt at the same time, stop paying salaries and fire all their employees, making a huge amount of people unemployed, and stop paying rent, making a huge amount of real estate companies go bankrupt, don't you think we're already in the largest financial crisis in human history? If we can pause the economy, preserving all employment contracts, lease agreements, loan agreements, etc, then we're in a much better position for restarting the economy once quarantines and lockdowns can be lifted. But you would rather let everything burn down because existing contracts must be honoured as-is because won't somebody think of the poor bankers?
- zaroth 7y ago
  So, for starters, total personal monthly income is $1.4 trillion dollars. Most people need their monthly salary to survive. We already need several hundred billion dollars just to shore up unemployment insurance funds, which just pay for a fraction of people’s salary. This has nothing to do with “the poor bankers”. Mostly it had to do with small businesses which make up the backbone of the American economy and which are collapsing at an extremely alarming rate. The government can’t just press a big magical pause button on the DVR. The government can try to pickup some of the bills, or it can loan money out at good rates, or it can fire cash bazookas directly into people’s checking accounts, but even the Fed can’t just print enough money to single handedly keep the entire economy afloat while legally restricting people from doing business. As long as everyone has stopped buying anything and everything discretionary, businesses will be failing and unemployment will skyrocket. Unemployment is a massive drag on GDP because consumer spending is the majority of consumption. GDP of -25% is not just a “tighten the belt and we’re gonna deal with this” type of event. It’s not merely a question of “we have to do this to save lives” because shooting the economy in the gut actually costs lives too. You put people out of work and into financial insolvency, and their general health is very negatively affected, and some of them will die. Look at the opioid crisis, for example.
  - wegs 7y ago
    Most people need that salary to survive due to fixed obligations: mortgages, rents, credit card debt, car leases, etc. That's what we need to pause. Beyond that, you have discretionary spending, which can be cut. And finally, you have essentials: food, medicine, and similar. That's a tiny, tiny fraction. That's what we need to bail out. Yes, there will be long-term consequences of lost production, which will shrink our economy a little bit. But that's fundamentally different from debt defaults, bankruptcies, and evictions. Hitting a pause button avoids all of that.

cmurf 7y ago

Those payments in turn pay for other things. Stopping them, stops everything. Pensions and 401ks, all kinds of commercial paper holding money short term stops, almost all home and commercial property sales stop, companies can't pay their own big bills due to vendors or fulfill order to customers, or can't convert bonds to stocks. It's too simple of an idea. What you are looking for is the time equivalent of printing money. Right now that's magical, it's a deus ex machina event. It's implausible. You have to innovate it, and until then it's a fantasy.

wegs 7y ago
> Those payments in turn pay for other things. Stopping them, stops everything. That's correct. We stop everything for 3 months to get rid of the virus. Or almost everything. > almost all home and commercial property sales stop Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. This is already stopped. > What you are looking for is the time equivalent of printing money It is like a time-equivalent of printing money. By virtue of the time-limit, it doesn't have nearly the same inflationary pressure. We need to relieve a short-term financial crunch, and the stimulus, zero interest, etc. all do that, but when the crunch is over, that stuff explodes into inflation. This cleans itself nicely. > It's too simple of an idea What's wrong with simple ideas?
- bawolff 7y ago
  You're stopping payments for a lot of things. I assume the people on the recieving ends of those payments are still expected to buy food somehow? How? Or are we also expecting that grocery stores provide food on credit that they are not expected to collect on any time soon?
- mindslight 7y ago
  > Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. You don't actually need to immediately record the deed to buy/sell real estate. I believe this used to be the norm back when remote towns would batch up all their new deeds and send them to the county seat by horse.

imtringued 7y ago

>It allows much more targeted aid at a fraction of the cost. Targeted aid is a code word for bailout.