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> I wonder if policy could be useful here: temporary rent and mortgage freezes perhaps? That's the big question. Can't everyone just be cool with deferring pay
by crispyambulance 7y ago
> I wonder if policy could be useful here: temporary rent and mortgage freezes perhaps?
That's the big question. Can't everyone just be cool with deferring payment on rents and mortgages? Ultimately this all bubbles up to banks and investment products, right?
I wish it were possible to just declare this "the lost Spring of 2020" and allow the market to take a hit and then recover steadily without entire cities beset with many months of boarded-up storefronts and foreclosed properties.
- imtringued 7y agoWhy not just give those who need the money a loan? Deferring rent payments and mortgages is basically a non formal loan but it is shifting all the risk into the banks. Let's say you are a bank and you defer 4 months of mortgage payments and then the landlord defaults. Those 4 lost months are now the liability of the bank. This is basically a non formal form of economic stimulus. So what you have done is take a problem that was caused by the government (the economic loss from quarantine dwarfs the economic loss of everyone having the corona virus [0]) and shift all responsibility away from it into a fragile system that is known to break frequently. The idea behind this bullshit is to say "no bailouts" but the reality is that once the banking system is collapsing there will be far severe bailouts than before and all the work you have to prevent them was a complete waste and completely distorted the economy. Events like 2008 were entirely about markets destroying themselves but now the situation has reversed and it's the government that is trying to deliberately destroy the economy and then people shout louder and want even more destruction.