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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 u

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.

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.