5 ms·

Is Bank of Japan not going to print money to finance this?

tempsy 6y ago
If you’re going to print money then spend it on the people to shore up demand, rather than prop up companies where the demand will never be there or come back post lockdown. Without shoring up the demand side I’m not seeing how we get to this rosy V shaped recovery the stock market seems to be predicting.
- busymom0 6y ago
  I am looking at the breakdown here of the 2 Trillion billion. Note that this excludes the phase 3.5 which was passed yesterday which includes another $484 billion for small businesses: https://www.visualcapitalist.com/the-anatomy-of-the-2-trillion-covid-19-stimulus-bill/ https://www.visualcapitalist.com/the-anatomy-of-the-2-trilli... The 2 trillion bill included: $425 for large corporations = 25% of the money $377 for small businesses = 20% of the money (originally excluding the another $484 billion) $377 + $484 from yesterday = $861 billion for small businesses which is more than double the money for large corporations. Also the large corporations includes $58 billion for airline industry. I don't see how this is a bad thing at all? Also considering the large corporation includes companies which operate cruise industry, airline industry, travel etc which employs millions of people, should they not be given help? $861 billion for small businesses and $425 for large is very fair.
  - tempsy 6y ago
    The PPP loan program is ripe for moral hazard. Zero accountability. Banks have no incentive to spend time to underwrite because it’s all guaranteed by the government (e.g. fraud, gaming the forgiveness period, extracting assets and bankrupting company). Would be surprised if there were more business using the money in earnest to save jobs than not.
  - rswail 6y ago
    The reasons that the cruise and airline companies should not be bailed out are: 1. Cruise companies are registered off shore, do not pay US taxes and do not employ US taxpayers. Their "industry" is exploitative, polluting, and dangerous to public health. 2. Airlines have spent the last 10 years using excess cash to do share buybacks, thus "juicing" their share price and providing tax effective "dividends" to their shareholders while literally not saving for a rainy day. 3. These bailouts have not been tied to the government receiving equity or to any sacrifices/haircuts by existing equity or debt holders. This is unconscionable expenditure of taxpayer funds, socializing losses while privatizing gains. 4. Large corporations already have sufficient lines of credit and other sources of funds. Small businesses are both the primary employers of the majority of the workforce and also the primary location of both supply and demand of consumption in the economy.
- apatters 6y ago
  Giving people money isn't going to restore consumer confidence. People are afraid to leave their homes. Even when the government starts easing restrictions, they'll still be afraid. They will buy groceries, pay for rent and Netflix, and save the rest of their money. I know people who have not left their homes for weeks. Consumer confidence is at absolute historic lows with no clear path to restoring it. This means there is likewise no clear path to a restoration of the parts of the economy which are currently disappearing. The tools of economic policymakers are mostly ineffective in the current situation. The only way a recovery of any kind will happen, and it will likely be slow, is if people start venturing out of their houses again and looking for places to spend money. The government's role has to start with literally encouraging people to step outside of their front doors and walk around.
  - lbeltrame 6y ago
    > The government's role has to start with literally encouraging people to step outside of their front doors and walk around. Some governments may (involuntarily) do the exact opposite and scare people even more. In Italy there are countless of rumors amplified by the media that there will be strict and onerous requirements for most activities to be done (such as, clothing shops having to disinfect every single piece that has been tried on, no air conditioning at all costs, use of plexiglas visors in addition to masks for many close-to-face activities...) that will likely a. not restart businesses (because they're on top of all other regulations) and b. scare people so much that they will not like going out of their house (would you even go to buy clothes knowing you can be contaminated by the "plague"?).

If you’re going to print money then spend it on the people to shore up demand, rather than prop up companies where the demand will never be there or come back post lockdown. Without shoring up the demand side I’m not seeing how we get to this rosy V shaped recovery the stock market seems to be predicting.

busymom0 6y ago
I am looking at the breakdown here of the 2 Trillion billion. Note that this excludes the phase 3.5 which was passed yesterday which includes another $484 billion for small businesses: https://www.visualcapitalist.com/the-anatomy-of-the-2-trillion-covid-19-stimulus-bill/ https://www.visualcapitalist.com/the-anatomy-of-the-2-trilli... The 2 trillion bill included: $425 for large corporations = 25% of the money $377 for small businesses = 20% of the money (originally excluding the another $484 billion) $377 + $484 from yesterday = $861 billion for small businesses which is more than double the money for large corporations. Also the large corporations includes $58 billion for airline industry. I don't see how this is a bad thing at all? Also considering the large corporation includes companies which operate cruise industry, airline industry, travel etc which employs millions of people, should they not be given help? $861 billion for small businesses and $425 for large is very fair.
- tempsy 6y ago
  The PPP loan program is ripe for moral hazard. Zero accountability. Banks have no incentive to spend time to underwrite because it’s all guaranteed by the government (e.g. fraud, gaming the forgiveness period, extracting assets and bankrupting company). Would be surprised if there were more business using the money in earnest to save jobs than not.
- rswail 6y ago
  The reasons that the cruise and airline companies should not be bailed out are: 1. Cruise companies are registered off shore, do not pay US taxes and do not employ US taxpayers. Their "industry" is exploitative, polluting, and dangerous to public health. 2. Airlines have spent the last 10 years using excess cash to do share buybacks, thus "juicing" their share price and providing tax effective "dividends" to their shareholders while literally not saving for a rainy day. 3. These bailouts have not been tied to the government receiving equity or to any sacrifices/haircuts by existing equity or debt holders. This is unconscionable expenditure of taxpayer funds, socializing losses while privatizing gains. 4. Large corporations already have sufficient lines of credit and other sources of funds. Small businesses are both the primary employers of the majority of the workforce and also the primary location of both supply and demand of consumption in the economy.
apatters 6y ago
Giving people money isn't going to restore consumer confidence. People are afraid to leave their homes. Even when the government starts easing restrictions, they'll still be afraid. They will buy groceries, pay for rent and Netflix, and save the rest of their money. I know people who have not left their homes for weeks. Consumer confidence is at absolute historic lows with no clear path to restoring it. This means there is likewise no clear path to a restoration of the parts of the economy which are currently disappearing. The tools of economic policymakers are mostly ineffective in the current situation. The only way a recovery of any kind will happen, and it will likely be slow, is if people start venturing out of their houses again and looking for places to spend money. The government's role has to start with literally encouraging people to step outside of their front doors and walk around.
- lbeltrame 6y ago
  > The government's role has to start with literally encouraging people to step outside of their front doors and walk around. Some governments may (involuntarily) do the exact opposite and scare people even more. In Italy there are countless of rumors amplified by the media that there will be strict and onerous requirements for most activities to be done (such as, clothing shops having to disinfect every single piece that has been tried on, no air conditioning at all costs, use of plexiglas visors in addition to masks for many close-to-face activities...) that will likely a. not restart businesses (because they're on top of all other regulations) and b. scare people so much that they will not like going out of their house (would you even go to buy clothes knowing you can be contaminated by the "plague"?).