5 ms·

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligat

by wegs 7y ago

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3SjhsZ0ztpG5bMzA3WNbVNhU/edit https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...

wrkronmiller 7y ago
And what about international obligations? What about mortgage-backed securities?
- wegs 7y ago
  International obligations, where governed by US law, get placed on hold too. Ideally, other countries join in the regime. If not, you're just talking about a much smaller amount of debt (US debt held under foreign jurisdictions). Mortgage-backed securities generate no income for a couple of months.
  - im3w1l 7y ago
    If you stop paying other countries, the goods stop flowing. Or are you going to swing the military dick around to force people to give you stuff for free?
    - op00to 7y ago
      Nope. The world floats on net terms. Companies extend terms frequently. Doing so is not as big of a deal as you are making this out to be.
- joe_the_user 7y ago
  Pensions and institutions people need to survive get a bailout. Speculators lose their shirts.
  - marcus0x62 7y ago
    What’s the difference between a worthy investor and a speculator? Is it sort of like the difference between a church and a cult?
    - Red_Leaves_Flyy 7y ago
      Net worth?
    - throwaway3563 7y ago
      Holding duration.
humanrebar 7y ago
And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?
- wegs 7y ago
  That's where you need much smaller bailouts and stimuli. Agriculture is less than 1% of the GDP. The currently-discussed bailout is big enough to feed all of America for years. And it's actually not a bad idea to nationalize food distribution -- supermarkets are where the virus spreads. Many countries have switched to safe deliveries of food. And conversely, the current bailout, as proposed, doesn't come anywhere close to stopping mortgage defaults, layoffs, and the slew of other issues. Now, this plan basically means you don't buy new things (cars, laptops) for 3 months, but I think that's okay. But yes, it only covers 95% of the problem. Companies might need help with, for example, restarting production lines, maintenance costs, supply chain delays, or other issues. All that is pocket change compared to what we're looking at spending right now.
  - 6510 7y ago
    But the commies have been telling us that for years and we didn't listen. Why would we listen now? I'm joking, well put, thanks.
- novok 7y ago
  They get a bailout.
- ForHackernews 7y ago
  Maybe landlords will need to get a real job. I hear Amazon is hiring warehouse staff.
  - samsonradu 7y ago
    Joke aside, you’re spot on in that the economy can only bear a certain level of rent-seeking. That level is going down now, which might also be seen as a return to normal. Pumping money in ETFs and real estate (aka passive income) can’t enrich everybody, productive output is required.
candybar 7y ago
This simply doesn't work at all. First, the situation is not that dire to start with, most people and businesses can meet their obligations. We don't have anything remotely close to a financial crisis. It makes no sense to effectively turn the entire economy into a command economy and effectively declare a default to save what appears to be a fairly small part of the economy that will have trouble. You can have targeted intervention and get most of the benefit without dragging the rest of the economy into this. Second, you can't just remove credit from the system. Credit is fundamental to nearly all transactions at scale - transactions in the real world aren't atomic, which means businesses are always dealing with receivables and payables, not to mention lines of credit that are designed to help businesses manage them. There are tons of offsetting contracts, whether in terms of derivatives or insurance, and no one is going to be able to figure out which side of each contract is covered and which isn't and how to price anything given the uncertainty. Do health insurance companies have to pay hospitals? Do car insurance companies have to pay? These are all payments. Nothing happens in an economy without a payment. Do you have to pay insurance premiums? The effective result of this would be all financial markets not functioning and nearly all real markets too, since they are tied to the financial markets for pricing, settlement and credit. It would be like the global financial crisis but a substantially worse version where every company becomes the Lehman Brothers. You'd have to basically nationalize everything across the entire world and run a command economy because the markets simply won't function at all even on a purely basic level.
- ianleeclark 7y ago
  > First, the situation is not that dire to start with, most people and businesses can meet their obligations. 76% of americans live paycheck-to-paycheck. Regardless of if you like it or not, a time will come when massive amounts of rents aren't paid. It can either fully immiserate the economy (most likely course of action), or it can be paused. > the markets simply won't function at all even on a purely basic level Can we please stop pretending that this zombie market we've propped up since 2008 works? If you like markets, then you shouldn't agree with the fact that the government can effectively be held hostage every decade or so due to "too big to fail."
  - 7y ago
imtringued 7y ago
retail (paused) -> land lord (paused) -> bank (paused) -> everyone else -> retail Do you see the problem? You forgot to pause "everyone else". You'll have to add millions of special case laws to pause everything. That guy with his gym membership who can't use it? Pause it! ISP subscription? Pause it! Mom's knitting club membership fee? Pause it! ... million pauses later you're done. It's like having 1 million bolts each with a different size. You'll need a different wrench for each bolt. Why not just standardize on a single screw head? Sure screws aren't exactly bolts but anyone who wants a screw can get it. If you're handing out bolts and wrenches then you're picking winners. This is known as a bailout for special interests by only pausing certain hand picked industries. Meanwhile, a loan works for anyone who wants one. It still means that the economic machine is empty but at least it keeps running and doesn't need to be restarted from scratch.

by wegs 7y ago

wrkronmiller 7y ago

And what about international obligations? What about mortgage-backed securities?

wegs 7y ago
International obligations, where governed by US law, get placed on hold too. Ideally, other countries join in the regime. If not, you're just talking about a much smaller amount of debt (US debt held under foreign jurisdictions). Mortgage-backed securities generate no income for a couple of months.
- im3w1l 7y ago
  If you stop paying other countries, the goods stop flowing. Or are you going to swing the military dick around to force people to give you stuff for free?
  - op00to 7y ago
    Nope. The world floats on net terms. Companies extend terms frequently. Doing so is not as big of a deal as you are making this out to be.
joe_the_user 7y ago
Pensions and institutions people need to survive get a bailout. Speculators lose their shirts.
- marcus0x62 7y ago
  What’s the difference between a worthy investor and a speculator? Is it sort of like the difference between a church and a cult?
  - Red_Leaves_Flyy 7y ago
    Net worth?
  - throwaway3563 7y ago
    Holding duration.

humanrebar 7y ago

And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?

wegs 7y ago
That's where you need much smaller bailouts and stimuli. Agriculture is less than 1% of the GDP. The currently-discussed bailout is big enough to feed all of America for years. And it's actually not a bad idea to nationalize food distribution -- supermarkets are where the virus spreads. Many countries have switched to safe deliveries of food. And conversely, the current bailout, as proposed, doesn't come anywhere close to stopping mortgage defaults, layoffs, and the slew of other issues. Now, this plan basically means you don't buy new things (cars, laptops) for 3 months, but I think that's okay. But yes, it only covers 95% of the problem. Companies might need help with, for example, restarting production lines, maintenance costs, supply chain delays, or other issues. All that is pocket change compared to what we're looking at spending right now.
- 6510 7y ago
  But the commies have been telling us that for years and we didn't listen. Why would we listen now? I'm joking, well put, thanks.
novok 7y ago
They get a bailout.
ForHackernews 7y ago
Maybe landlords will need to get a real job. I hear Amazon is hiring warehouse staff.
- samsonradu 7y ago
  Joke aside, you’re spot on in that the economy can only bear a certain level of rent-seeking. That level is going down now, which might also be seen as a return to normal. Pumping money in ETFs and real estate (aka passive income) can’t enrich everybody, productive output is required.

candybar 7y ago

This simply doesn't work at all. First, the situation is not that dire to start with, most people and businesses can meet their obligations. We don't have anything remotely close to a financial crisis. It makes no sense to effectively turn the entire economy into a command economy and effectively declare a default to save what appears to be a fairly small part of the economy that will have trouble. You can have targeted intervention and get most of the benefit without dragging the rest of the economy into this. Second, you can't just remove credit from the system. Credit is fundamental to nearly all transactions at scale - transactions in the real world aren't atomic, which means businesses are always dealing with receivables and payables, not to mention lines of credit that are designed to help businesses manage them. There are tons of offsetting contracts, whether in terms of derivatives or insurance, and no one is going to be able to figure out which side of each contract is covered and which isn't and how to price anything given the uncertainty. Do health insurance companies have to pay hospitals? Do car insurance companies have to pay? These are all payments. Nothing happens in an economy without a payment. Do you have to pay insurance premiums? The effective result of this would be all financial markets not functioning and nearly all real markets too, since they are tied to the financial markets for pricing, settlement and credit. It would be like the global financial crisis but a substantially worse version where every company becomes the Lehman Brothers. You'd have to basically nationalize everything across the entire world and run a command economy because the markets simply won't function at all even on a purely basic level.

ianleeclark 7y ago
> First, the situation is not that dire to start with, most people and businesses can meet their obligations. 76% of americans live paycheck-to-paycheck. Regardless of if you like it or not, a time will come when massive amounts of rents aren't paid. It can either fully immiserate the economy (most likely course of action), or it can be paused. > the markets simply won't function at all even on a purely basic level Can we please stop pretending that this zombie market we've propped up since 2008 works? If you like markets, then you shouldn't agree with the fact that the government can effectively be held hostage every decade or so due to "too big to fail."
- 7y ago

imtringued 7y ago

retail (paused) -> land lord (paused) -> bank (paused) -> everyone else -> retail Do you see the problem? You forgot to pause "everyone else". You'll have to add millions of special case laws to pause everything. That guy with his gym membership who can't use it? Pause it! ISP subscription? Pause it! Mom's knitting club membership fee? Pause it! ... million pauses later you're done. It's like having 1 million bolts each with a different size. You'll need a different wrench for each bolt. Why not just standardize on a single screw head? Sure screws aren't exactly bolts but anyone who wants a screw can get it. If you're handing out bolts and wrenches then you're picking winners. This is known as a bailout for special interests by only pausing certain hand picked industries. Meanwhile, a loan works for anyone who wants one. It still means that the economic machine is empty but at least it keeps running and doesn't need to be restarted from scratch.