24 ms·

Japan to subsidize 100% of salaries at small companies

421 points by yoquan 6y ago

gen3 6y ago
> The employment adjustment subsidy has not proved popular so far, partly owing to its complicated paperwork and the roughly one-month wait for processing applications. In the current crisis, just 985 companies had applied in the two months leading up to April 17 The wait time on this seems very long. I wonder why? Lack of staff? I guess its good that they already had a program going, instead of having to build one from scratch or do what the US has done and partner with banks (Which seems to have also been plagued with hurtles)
- tempsy 6y ago
  Ask anyone here trying to access unemployment benefits. Bureaucracy is universal, and sometimes an intentional design pattern to discourage people from applying in the first place.
  - kylebenzle 6y ago
    SOMETIMES AN INTENTIONAL DESIGN PATTERN TO DISCOURAGE PEOPLE FROM APPLYING
  - tenpies 6y ago
    I mean half the benefit of unemployment benefits is the employment you generate via bureaucracy. It's something I find a lot of UBI proponents miss. Sure you "save money" by cutting bureaucracy, but that bureaucracy is employed people. The savings probably aren't as considerable when you have to lay off a ton of people in order to put them on UBI. And sure, for the private sector, bureaucracy is generally something they try to quash (with varying effectiveness), but in the public sector it's almost a desired outcome because it means more jobs, more metrics, more budget.
    - AbrahamParangi 6y ago
      Sure, but better (less wasteful) to just give people money than employ them in busywork.
      - tasogare 6y ago
        No, because giving people a job means giving them a structured and social life, as well as a place in society and the feeling they contribute to it. This is very different from just giving people unemployment money, that then fuels a particular lifestyle that is hard to get out of (I have few friends that get trapped into this at some point).
      - clairity 6y ago
        almost nothing is truly only busywork (besides, that’s belittling), so it’s better to employ people than give away money. employment has many beneficial side effects, like esteem, that free money doesn’t have.
        deleted 6y ago
        [deleted]
      - deleted 6y ago
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    - deleted 6y ago
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  - grecy 6y ago
    > Bureaucracy is universal No, it is not. In Canada the application process takes 2.5 minutes and the money is deposited 2 days later. Many people have already had $4000 deposited in their account (two payments), and will get another $2000 deposit in the 9th of May. Just because something is terribly broken in one country, don't make the mistake of assuming it's universal
tempsy 6y ago
Coming to the realization that our economic crisis (primarily massive number of newly unemployed) was largely avoidable with a scheme like this vs the PPP loan program and multi-trillion money printing we got instead.
- teruakohatu 6y ago
  10 millions laid off workers in Japan IS an economic crisis regardless. This is the equivalent of all the workers from the top 20-30+ companies in Japan no longer working.
  - Aeolun 6y ago
    Except these are mostly part-time or irregular workers. It’s like all the convenience store and restaurant staff suddenly being halved.
- aaronblohowiak 6y ago
  BoJ’s money printer has been going since well before cv19. They pioneered central banks buying ETFs (its even called Japanification..) I don’t believe the crisis would have been avoidable since salaries are only one part of the economy (ex:how does debt work?)
  - tempsy 6y ago
    The V shaped recovery is going to depend on rebounding consumer demand. Not convinced a lot of jobs will come back as soon as things reopen, and even if you have a job will you actually feel confident enough to spend as you did before? My main point is that the government has done little on the demand side. I think it will be very weak coming out of this.
    - lowdose 6y ago
      It all depends on how big that 10% is contributing to the GDP. Let's assume the least profitable employees are effected the most and thus have to absorb the largest unemployment hit. Than the percentage of the economy actually effected has to be a fraction of of the increase in unemployment.
johnzim 6y ago
Given that the BoJ literally can't seem to generate inflation no matter how hard it tries, this seems like a no-brainer. As close to helicopter money as they've yet come.
- Proven 6y ago
  No brainer for what (or to who)? Gainfully employed people already can't buy enough with their paychecks you want to increase their cost of living. What good is that going to do? It's funny (but it's becoming horrifying, especially in this election year in the US) how economically clueless most people are.
- ShorsHammer 6y ago
  Technological advancement really is a curse. Given that Japanese quality of life has barely moved in decades despite the economic hardships perhaps it's time for regulators to stop focusing on the arbitrary 2-3% inflation metric which causes so much distortion in monetary policy? Why exactly can the inflation range targeted by Central Banks never change?
  - pgz 6y ago
    I always suspected governments desperately seek 2% inflation because they are long term borrowers.
  - gimmeThaBeet 6y ago
    There's a bit of truth there, not that my opinion means much, but Japan's biggest issue is that they haven't invested enough in the people, and by extension supporting domestic growth/consumption. And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut. Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom. I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects. One thought experiment I have is a little about investment/consumption, and debt. If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now. If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?
millstone 6y ago
No insight into Japan, but the US in particular should be aggressively shoveling money at business payroll as well. Some reasons why: First is to keep workers out of state unemployment insurance programs. These differ per state, but are often deliberately miserly and/or burdensome so that they motivate recipients to go find a new job. But we don't want the unemployed to hit the bricks. Payroll support is then a more easily-administered form of federal UI. (Plus state UI is written in COBOL, they will literally crash.) Also, retaining workers will help to ensure a V-shaped economic recovery. Once the health crisis ends, retained workers can just go back to work. But layoffs followed by rehires means more retraining (not retaining), and a slower recovery. The point is that we literally cannot pinch pennies now: anything we "save" will hit us twice as hard as a new entitlement cost, or a cost to the states, or in reduced tax revenue, or whatnot. Money is a fiction; the real risk is mouldering factories and disused skills. If a year from now the US is trillions more in debt, and prices are 2% higher, YET we are healthy and working and productive, we will have been successful in countering the health and economic crisis. We should be so lucky.
- myko 6y ago
  Yep, companies are losing the ability to pay employees all over the US right now. Stay at home orders are almost certainly the right thing to do - the government needs to make it easy to do them.
- khuey 6y ago
  The $600/wk benefit that the Feds added was precisely to make unemployment sufficiently generous that people would not be motivated to go find a new job right now.
  - newacct583 6y ago
    Yes, but this is a bonus on top of existing state benefits. And as mentioned upthread, it's actually proving surprisingly (or... not) difficult for people to actually apply, qualify for and receive benefits in some states.
  - millstone 6y ago
ethanbond 6y ago
1. Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution necessary. 2. For landlords who cannot sustain the loss of cash flow, offer to buy them out at market price and then hire them as property managers for their previously owned properties. With essentially zero overhead, you've eliminated small business's first or second largest expense (payroll and rent). If they still can't make payroll, it's not a super huge deal since those employees also have their rent frozen. Now the economy can hibernate. When we're ready to resuscitate it, do a direct stimulus check as you reopen businesses. Let money start flowing without any component going to rent for some amount of time until we're back on solid footing.
- hpoe 6y ago
  So I know a guy that he bought some real estate he owns 3 properties I think. He isn't a millionaire just a software engineer working the 9-5 and the properties exist mostly to help him prepare for retirement. Now he has some money set aside so that if one of his properties goes dormant he can cover it for a while, but if he were to lose all three of them at the same time. That would be bad. Then you suggest the government can just buy him out at market rates. Who decides what the market rate is? What if the government decides to value the property for $50,000 less than it is worth? Well suddenly he has just had $150,000 taken from him by the government. When things restabiloxe what do we do then? The government owns tons of housing? Who is going to manage and administer that? If they dump them than all that you've done is transferred the properties from small owners to massive multi-million dollar firms that managed to take the hit. What about people who got laid off and still don't have a job after it is over? Because it was a result of the coronavirus do we just continue to say it's okay don't pay rent? If we do that guarantee a year from now tons of properties won't be paying rent still. It sounds like an easy and simple fix but it is usually more complicated than that and drastic decisions made will often have downsteam effect for years and decades that we can't see now.
  - ethanbond 6y ago
    As far as pricing: simply purchase the properties for whatever their value was last declared on tax forms. Can even add 5-10% for good measure. You lowballed the government to decrease tax burden? No problem, that’s the price you get. This isn’t an anti-millionaire plot, so it doesn’t matter much what he earns. This is a hibernate-then-stimulate plot. We cannot hibernate if businesses and individuals are getting absolutely gutted at the end of each month. We cannot stimulate if stimulus checks are going directly into landlords’ pockets. After this is over, yes, either the government can keep it (as Singapore does) or even sell them back, giving preference to the original owners at the original price (who had been kept employed throughout the hibernation). The land itself is not charging landlords to hold it, so landlords don’t need to be charging tenants to exist on it (except mortgages/taxes, which would be frozen).
Proven 6y ago
Wonderful! Why do we still have to work again? It won't be very long before Magic Money Tree loses to toilet paper, pound-for-pound.
siruncledrew 6y ago
Japan has a good bottom-up focus by addressing employee payroll and by proxy employee/employer job security during a negative economic outlook. Grassroots money instead of helicopter money. The government directly intervening to support employees sounds like a better effort to influence widespread impact than propping up employers to trickle down the money with vague guidelines and questionable oversight. Businesses, in particular SMBs still need financial help, but that help should be separate from the public support help for PTEs and FTEs. The US still clings on to the top-down approach to solve these problems, counter to Japan (not that Japan is perfect either).
tsbinz 6y ago
Germany/Austria/Switzerland have similar programs (called Kurzarbeit) which are for situations like these (where companies don't have enough work at the moment but are believed to recover), https://en.wikipedia.org/wiki/Short-time_working https://en.wikipedia.org/wiki/Short-time_working - what was done for the covid crisis here (Switzerland) was to simplify the application process for it.
- adev_ 6y ago
  Same in France and currently most European Union countries.
  - m4rtink 6y ago
    Can confirm Czech Republic is also doing it.
throwaway122378 6y ago
This will prove ineffective in a few months. Not all 100% Of jobs lost are coming back.
nl 6y ago
Australia has a similar program, but universally applicable (not just small companies) to any company which can show negative effects from COVID-19. They subsidise salaries at a flat rate of $1500/fortnight.
- deleted 6y ago
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drallison 6y ago
The Danish approach to closing down the economy in the face of a pandemic made more sense to me than that used by Trump and the US Administration. https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/ https://www.theatlantic.com/ideas/archive/2020/03/denmark-fr...
throwawaysea 6y ago
Perhaps what we need to consider is some scheme to automatically fund a salary floor or salary continuation in emergency times, even if UBI is not on the immediate horizon. Presumably the currency dilution that results is no worse than what we are taking up anyways with the current piecemeal stimulus packages.
yalogin 6y ago
Our trickle down economics philosophy in the US does not let the government do this. The onus will be on propping up businesses, when all they need to do was support employees. Instead we bail out whole companies and that usually means paying a lot more than just employee salaries.
joebloom 6y ago
UK was early out of the doors with 80% wages furlough. It gives both employees and businesses the ability to survive the period and come out of the other end able to get straight back into work. But who knows how long that lasts whilst there is a likely recession on the cards next. And so the government takes on 100 years of debt by giving future taxes to lenders.
crimsonalucard 6y ago
Makes a lot more sense then bailing out companies.
dhasso 6y ago
After the announce of 100k yens per people (~$1000), they might finally become more serious...
sunsetSamurai 6y ago
Every time I read news like this, I wonder where all that money is coming from? As far as I know, Japan is one of the most indebted countries out there. Look at the USA too, they've printed like 2 trillion dollars during this crisis, my own country has a dept of around 50% of its GDP. I feel like most countries have not intention of paying their debt ever, the politicians are just kicking the can down the road until one day all this explodes and all this debt is forgotten, maybe? There's probably something I'm missing since I am not an economist.
- ducttapecrown 6y ago
  The debt of a country is completely different from the debt of a person or a company. Basically the difference is that countries can print money, but what it means is that large amounts of debt are okay and even desirable. The U.S. in particular is in an even safer spot because the dollar is the world reserve currency. The debt of the worlds countries will explode if and only if money goes to hell. I'm not an expert, so I'd encourage you to do some your own research.
- csomar 6y ago
  > There's probably something I'm missing since I am not an economist. What you are missing is that these countries are leveraging their positions as reserve currencies both for global corporations and also other countries. This crisis strongly benefited the USD, EUR and JPY. The demand for these currencies (especially the USD) is in the trillions. In the unfortunate event that the European Union is dissolved and countries like Italy/Spain decides to switch to their own, most people/companies holding EUR will decide to switch to ... probably USD/JPY as they don't really trust their home currencies much. That's why the U.S. has an (or multiple) air carrier around the world to project power.
- zemnmez 6y ago
  being in debt as a country is very different to being in debt as an individual as a country's expenditure directly correlate to its earnings. in this sense, it's unwise for a country to 'save' in the same way individuals do -- since, for example in this case if small businesses collapse causing their workers to spend less (or nothing at all) the decrease in economic activity will lower tax income to the country itself. when it comes to the US injecting 2 trillion dollars, that's from quantitative easing which is not 'borrowed', it's just generated by the central bank of the country directly to increase liquidity. it's similar to a stock split, but for a country. The total 'value' in the economy stays the same, but the additional liquidity creates an increase in economic activity for some time which may allow investors to switch investments from short to longer term. I've seen a lot of people online who think the US had $2T lying around somewhere but it's quite the opposite. slightly unrelated to your comment particularly but -- I wish the analysis of governments being able to spend like this from the average person wasn't either 'governments are going more into debt than they should' or 'governments have money but don't use it on their people', but 'governments have access to spending powers that individuals do not, which can massively benefit an economy in the way no other entity's spending can'.
adev_ 6y ago
The government is making the right move. Japan has in its economy a large number of small family business in sector like retail, crafting, Ryokan (hotels) or restaurants. Some of them are two centuries old and still surviving from generations to generations. They are part of soul of Japan and its cultural identity. Loosing them would be such a waste, not only socially but also culturally. Many of them have seen their income going to close to Zero due to COVID19. Without government help, many of them would die and never recover.
hnarn 6y ago
In an extremely simplified way, from an economic standpoint, I see two ways this crisis can be handled: 1) Shovel money into businesses essentially free of charge, taking over responsibility for their payroll, giving generous low percentage loans or even free grants, and anything else that can simply be considered "free money" for company owners. Or: 2) See this for what it is, which is an extremely high-risk investment that no-one else is willing to make. If a company was able to find a better deal on the market, they would take it. If companies are forced to apply for help from the state to survive, the state should get a (minority) share of the company and reap any potential future benefits until the owners have the money to buy their shares back. The way I see it, in #1 we do our best to halt the crisis, but we essentially do it by giving away free money to corporations and small companies. In #2, we still do the same thing (because there's in most cases not much difference between a high-risk investment and a gift), but at least in this case the tax payer may get something for it in the future. If public money goes to bailing out private companies, the public deserves a share of future profits, until those companies can buy the shares back at market value. I don't see a loser in this scenario, and in fact, it would be refreshing to see and end to this constant policy of "privatize profit, socialize loss".
gigatexal 6y ago
I’ve been saying this for weeks now: just have the treasury pay employees so that people stay in their jobs and can keep buying.
m3kw9 6y ago
Basically it sounds good but the application process is a nightmare
perfunctory 6y ago
This might be the right thing to do at the moment. In the long term though I'd prefer a system where stimulus package is not based on one's employment. This has the same problems as employer-tied health insurance.

421 points by yoquan 6y ago

gen3 6y ago

> The employment adjustment subsidy has not proved popular so far, partly owing to its complicated paperwork and the roughly one-month wait for processing applications. In the current crisis, just 985 companies had applied in the two months leading up to April 17 The wait time on this seems very long. I wonder why? Lack of staff? I guess its good that they already had a program going, instead of having to build one from scratch or do what the US has done and partner with banks (Which seems to have also been plagued with hurtles)

tempsy 6y ago
Ask anyone here trying to access unemployment benefits. Bureaucracy is universal, and sometimes an intentional design pattern to discourage people from applying in the first place.
- kylebenzle 6y ago
  SOMETIMES AN INTENTIONAL DESIGN PATTERN TO DISCOURAGE PEOPLE FROM APPLYING
- tenpies 6y ago
  I mean half the benefit of unemployment benefits is the employment you generate via bureaucracy. It's something I find a lot of UBI proponents miss. Sure you "save money" by cutting bureaucracy, but that bureaucracy is employed people. The savings probably aren't as considerable when you have to lay off a ton of people in order to put them on UBI. And sure, for the private sector, bureaucracy is generally something they try to quash (with varying effectiveness), but in the public sector it's almost a desired outcome because it means more jobs, more metrics, more budget.
  - AbrahamParangi 6y ago
    Sure, but better (less wasteful) to just give people money than employ them in busywork.
    - tasogare 6y ago
      No, because giving people a job means giving them a structured and social life, as well as a place in society and the feeling they contribute to it. This is very different from just giving people unemployment money, that then fuels a particular lifestyle that is hard to get out of (I have few friends that get trapped into this at some point).
    - clairity 6y ago
      almost nothing is truly only busywork (besides, that’s belittling), so it’s better to employ people than give away money. employment has many beneficial side effects, like esteem, that free money doesn’t have.
      - deleted 6y ago
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    - deleted 6y ago
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  - deleted 6y ago
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- grecy 6y ago
  > Bureaucracy is universal No, it is not. In Canada the application process takes 2.5 minutes and the money is deposited 2 days later. Many people have already had $4000 deposited in their account (two payments), and will get another $2000 deposit in the 9th of May. Just because something is terribly broken in one country, don't make the mistake of assuming it's universal

tempsy 6y ago

Coming to the realization that our economic crisis (primarily massive number of newly unemployed) was largely avoidable with a scheme like this vs the PPP loan program and multi-trillion money printing we got instead.

teruakohatu 6y ago
10 millions laid off workers in Japan IS an economic crisis regardless. This is the equivalent of all the workers from the top 20-30+ companies in Japan no longer working.
- Aeolun 6y ago
  Except these are mostly part-time or irregular workers. It’s like all the convenience store and restaurant staff suddenly being halved.
aaronblohowiak 6y ago
BoJ’s money printer has been going since well before cv19. They pioneered central banks buying ETFs (its even called Japanification..) I don’t believe the crisis would have been avoidable since salaries are only one part of the economy (ex:how does debt work?)
- tempsy 6y ago
  The V shaped recovery is going to depend on rebounding consumer demand. Not convinced a lot of jobs will come back as soon as things reopen, and even if you have a job will you actually feel confident enough to spend as you did before? My main point is that the government has done little on the demand side. I think it will be very weak coming out of this.
  - lowdose 6y ago
    It all depends on how big that 10% is contributing to the GDP. Let's assume the least profitable employees are effected the most and thus have to absorb the largest unemployment hit. Than the percentage of the economy actually effected has to be a fraction of of the increase in unemployment.

johnzim 6y ago

Given that the BoJ literally can't seem to generate inflation no matter how hard it tries, this seems like a no-brainer. As close to helicopter money as they've yet come.

Proven 6y ago
No brainer for what (or to who)? Gainfully employed people already can't buy enough with their paychecks you want to increase their cost of living. What good is that going to do? It's funny (but it's becoming horrifying, especially in this election year in the US) how economically clueless most people are.
ShorsHammer 6y ago
Technological advancement really is a curse. Given that Japanese quality of life has barely moved in decades despite the economic hardships perhaps it's time for regulators to stop focusing on the arbitrary 2-3% inflation metric which causes so much distortion in monetary policy? Why exactly can the inflation range targeted by Central Banks never change?
- pgz 6y ago
  I always suspected governments desperately seek 2% inflation because they are long term borrowers.
- gimmeThaBeet 6y ago
  There's a bit of truth there, not that my opinion means much, but Japan's biggest issue is that they haven't invested enough in the people, and by extension supporting domestic growth/consumption. And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut. Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom. I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects. One thought experiment I have is a little about investment/consumption, and debt. If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now. If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?

millstone 6y ago

No insight into Japan, but the US in particular should be aggressively shoveling money at business payroll as well. Some reasons why: First is to keep workers out of state unemployment insurance programs. These differ per state, but are often deliberately miserly and/or burdensome so that they motivate recipients to go find a new job. But we don't want the unemployed to hit the bricks. Payroll support is then a more easily-administered form of federal UI. (Plus state UI is written in COBOL, they will literally crash.) Also, retaining workers will help to ensure a V-shaped economic recovery. Once the health crisis ends, retained workers can just go back to work. But layoffs followed by rehires means more retraining (not retaining), and a slower recovery. The point is that we literally cannot pinch pennies now: anything we "save" will hit us twice as hard as a new entitlement cost, or a cost to the states, or in reduced tax revenue, or whatnot. Money is a fiction; the real risk is mouldering factories and disused skills. If a year from now the US is trillions more in debt, and prices are 2% higher, YET we are healthy and working and productive, we will have been successful in countering the health and economic crisis. We should be so lucky.

myko 6y ago
Yep, companies are losing the ability to pay employees all over the US right now. Stay at home orders are almost certainly the right thing to do - the government needs to make it easy to do them.
khuey 6y ago
The $600/wk benefit that the Feds added was precisely to make unemployment sufficiently generous that people would not be motivated to go find a new job right now.
- newacct583 6y ago
  Yes, but this is a bonus on top of existing state benefits. And as mentioned upthread, it's actually proving surprisingly (or... not) difficult for people to actually apply, qualify for and receive benefits in some states.
- millstone 6y ago

ethanbond 6y ago

1. Cancel rent payments, mortgage payments, and property taxes. People simply stop paying and stay where they are, no enforcement burden and no distribution necessary. 2. For landlords who cannot sustain the loss of cash flow, offer to buy them out at market price and then hire them as property managers for their previously owned properties. With essentially zero overhead, you've eliminated small business's first or second largest expense (payroll and rent). If they still can't make payroll, it's not a super huge deal since those employees also have their rent frozen. Now the economy can hibernate. When we're ready to resuscitate it, do a direct stimulus check as you reopen businesses. Let money start flowing without any component going to rent for some amount of time until we're back on solid footing.

hpoe 6y ago
So I know a guy that he bought some real estate he owns 3 properties I think. He isn't a millionaire just a software engineer working the 9-5 and the properties exist mostly to help him prepare for retirement. Now he has some money set aside so that if one of his properties goes dormant he can cover it for a while, but if he were to lose all three of them at the same time. That would be bad. Then you suggest the government can just buy him out at market rates. Who decides what the market rate is? What if the government decides to value the property for $50,000 less than it is worth? Well suddenly he has just had $150,000 taken from him by the government. When things restabiloxe what do we do then? The government owns tons of housing? Who is going to manage and administer that? If they dump them than all that you've done is transferred the properties from small owners to massive multi-million dollar firms that managed to take the hit. What about people who got laid off and still don't have a job after it is over? Because it was a result of the coronavirus do we just continue to say it's okay don't pay rent? If we do that guarantee a year from now tons of properties won't be paying rent still. It sounds like an easy and simple fix but it is usually more complicated than that and drastic decisions made will often have downsteam effect for years and decades that we can't see now.
- ethanbond 6y ago
  As far as pricing: simply purchase the properties for whatever their value was last declared on tax forms. Can even add 5-10% for good measure. You lowballed the government to decrease tax burden? No problem, that’s the price you get. This isn’t an anti-millionaire plot, so it doesn’t matter much what he earns. This is a hibernate-then-stimulate plot. We cannot hibernate if businesses and individuals are getting absolutely gutted at the end of each month. We cannot stimulate if stimulus checks are going directly into landlords’ pockets. After this is over, yes, either the government can keep it (as Singapore does) or even sell them back, giving preference to the original owners at the original price (who had been kept employed throughout the hibernation). The land itself is not charging landlords to hold it, so landlords don’t need to be charging tenants to exist on it (except mortgages/taxes, which would be frozen).

Proven 6y ago

Wonderful! Why do we still have to work again? It won't be very long before Magic Money Tree loses to toilet paper, pound-for-pound.

siruncledrew 6y ago

Japan has a good bottom-up focus by addressing employee payroll and by proxy employee/employer job security during a negative economic outlook. Grassroots money instead of helicopter money. The government directly intervening to support employees sounds like a better effort to influence widespread impact than propping up employers to trickle down the money with vague guidelines and questionable oversight. Businesses, in particular SMBs still need financial help, but that help should be separate from the public support help for PTEs and FTEs. The US still clings on to the top-down approach to solve these problems, counter to Japan (not that Japan is perfect either).

tsbinz 6y ago

Germany/Austria/Switzerland have similar programs (called Kurzarbeit) which are for situations like these (where companies don't have enough work at the moment but are believed to recover), https://en.wikipedia.org/wiki/Short-time_working https://en.wikipedia.org/wiki/Short-time_working - what was done for the covid crisis here (Switzerland) was to simplify the application process for it.

adev_ 6y ago
Same in France and currently most European Union countries.
- m4rtink 6y ago
  Can confirm Czech Republic is also doing it.

throwaway122378 6y ago

This will prove ineffective in a few months. Not all 100% Of jobs lost are coming back.

nl 6y ago

Australia has a similar program, but universally applicable (not just small companies) to any company which can show negative effects from COVID-19. They subsidise salaries at a flat rate of $1500/fortnight.

deleted 6y ago
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drallison 6y ago

The Danish approach to closing down the economy in the face of a pandemic made more sense to me than that used by Trump and the US Administration. https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/ https://www.theatlantic.com/ideas/archive/2020/03/denmark-fr...

throwawaysea 6y ago

Perhaps what we need to consider is some scheme to automatically fund a salary floor or salary continuation in emergency times, even if UBI is not on the immediate horizon. Presumably the currency dilution that results is no worse than what we are taking up anyways with the current piecemeal stimulus packages.

yalogin 6y ago

Our trickle down economics philosophy in the US does not let the government do this. The onus will be on propping up businesses, when all they need to do was support employees. Instead we bail out whole companies and that usually means paying a lot more than just employee salaries.

joebloom 6y ago

UK was early out of the doors with 80% wages furlough. It gives both employees and businesses the ability to survive the period and come out of the other end able to get straight back into work. But who knows how long that lasts whilst there is a likely recession on the cards next. And so the government takes on 100 years of debt by giving future taxes to lenders.

crimsonalucard 6y ago

Makes a lot more sense then bailing out companies.

dhasso 6y ago

After the announce of 100k yens per people (~$1000), they might finally become more serious...

sunsetSamurai 6y ago

Every time I read news like this, I wonder where all that money is coming from? As far as I know, Japan is one of the most indebted countries out there. Look at the USA too, they've printed like 2 trillion dollars during this crisis, my own country has a dept of around 50% of its GDP. I feel like most countries have not intention of paying their debt ever, the politicians are just kicking the can down the road until one day all this explodes and all this debt is forgotten, maybe? There's probably something I'm missing since I am not an economist.

ducttapecrown 6y ago
The debt of a country is completely different from the debt of a person or a company. Basically the difference is that countries can print money, but what it means is that large amounts of debt are okay and even desirable. The U.S. in particular is in an even safer spot because the dollar is the world reserve currency. The debt of the worlds countries will explode if and only if money goes to hell. I'm not an expert, so I'd encourage you to do some your own research.
csomar 6y ago
> There's probably something I'm missing since I am not an economist. What you are missing is that these countries are leveraging their positions as reserve currencies both for global corporations and also other countries. This crisis strongly benefited the USD, EUR and JPY. The demand for these currencies (especially the USD) is in the trillions. In the unfortunate event that the European Union is dissolved and countries like Italy/Spain decides to switch to their own, most people/companies holding EUR will decide to switch to ... probably USD/JPY as they don't really trust their home currencies much. That's why the U.S. has an (or multiple) air carrier around the world to project power.
zemnmez 6y ago
being in debt as a country is very different to being in debt as an individual as a country's expenditure directly correlate to its earnings. in this sense, it's unwise for a country to 'save' in the same way individuals do -- since, for example in this case if small businesses collapse causing their workers to spend less (or nothing at all) the decrease in economic activity will lower tax income to the country itself. when it comes to the US injecting 2 trillion dollars, that's from quantitative easing which is not 'borrowed', it's just generated by the central bank of the country directly to increase liquidity. it's similar to a stock split, but for a country. The total 'value' in the economy stays the same, but the additional liquidity creates an increase in economic activity for some time which may allow investors to switch investments from short to longer term. I've seen a lot of people online who think the US had $2T lying around somewhere but it's quite the opposite. slightly unrelated to your comment particularly but -- I wish the analysis of governments being able to spend like this from the average person wasn't either 'governments are going more into debt than they should' or 'governments have money but don't use it on their people', but 'governments have access to spending powers that individuals do not, which can massively benefit an economy in the way no other entity's spending can'.

adev_ 6y ago

The government is making the right move. Japan has in its economy a large number of small family business in sector like retail, crafting, Ryokan (hotels) or restaurants. Some of them are two centuries old and still surviving from generations to generations. They are part of soul of Japan and its cultural identity. Loosing them would be such a waste, not only socially but also culturally. Many of them have seen their income going to close to Zero due to COVID19. Without government help, many of them would die and never recover.

hnarn 6y ago

In an extremely simplified way, from an economic standpoint, I see two ways this crisis can be handled: 1) Shovel money into businesses essentially free of charge, taking over responsibility for their payroll, giving generous low percentage loans or even free grants, and anything else that can simply be considered "free money" for company owners. Or: 2) See this for what it is, which is an extremely high-risk investment that no-one else is willing to make. If a company was able to find a better deal on the market, they would take it. If companies are forced to apply for help from the state to survive, the state should get a (minority) share of the company and reap any potential future benefits until the owners have the money to buy their shares back. The way I see it, in #1 we do our best to halt the crisis, but we essentially do it by giving away free money to corporations and small companies. In #2, we still do the same thing (because there's in most cases not much difference between a high-risk investment and a gift), but at least in this case the tax payer may get something for it in the future. If public money goes to bailing out private companies, the public deserves a share of future profits, until those companies can buy the shares back at market value. I don't see a loser in this scenario, and in fact, it would be refreshing to see and end to this constant policy of "privatize profit, socialize loss".

gigatexal 6y ago

I’ve been saying this for weeks now: just have the treasury pay employees so that people stay in their jobs and can keep buying.

m3kw9 6y ago

Basically it sounds good but the application process is a nightmare

perfunctory 6y ago

This might be the right thing to do at the moment. In the long term though I'd prefer a system where stimulus package is not based on one's employment. This has the same problems as employer-tied health insurance.