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ideally, there would be a 3rd path, which would be direct forgiveness of those debts for a small period. All creditors would take the haircut, instead of the de
by abakker 7y ago
ideally, there would be a 3rd path, which would be direct forgiveness of those debts for a small period. All creditors would take the haircut, instead of the debtors. this means that incoming money would go back into the productive economy.
The odd thing about bailouts is that if you bailout businesses, they can't really spur consumer demand, and if you give it to individuals it tends to end up re-concentrated in the financial economy. If you want to ensure cashflow into the open economy, you need to ensure that the money that people have gets spent on goods, not financing.
- sagarm 7y ago> ideally, there would be a 3rd path, which would be direct forgiveness of those debts for a small period. All creditors would take the haircut, instead of the debtors. this means that incoming money would go back into the productive economy. Isn't bankruptcy exactly this, on a firm level?
- nickff 7y agoIn a bankruptcy, the stock-owners lose all their equity, and the bond-holders take a hit. The parent appears to be proposing that the bond-holders take a hit, in an attempt to preserve some equity for the stock-owners.
- a9h74j 7y agoA ridiculously improbable thought here: What if, in some regime, interest, rent etc. accrued only on "business days", and business days could be cancelled in a crisis?? Jigger the time metric????