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No, no proven mechanism. There are an infinity of answers why, mine: There is no "pause" when it comes to financial relationships. One org's liability is ano
by jonahbenton 6y ago
No, no proven mechanism.
There are an infinity of answers why, mine:
There is no "pause" when it comes to financial relationships.
One org's liability is another one's asset. Your rent payment goes to your building owner's mortgage, the payments from which are received by an SPV, which is an asset in the fixed income portion of your investment portfolio, which is itself an asset in which you have shares, the value of which determines the value to you.
So like the proverbial butterfly, you not paying your rent hits you on the other side.
These are all contractual relationships, usually private, and bespoke. There are legal consequences to you not paying your rent. Consequences to your owner not paying his mortgage. Consequences to the absence of delivery to the SPV. Consequences so the SPV not returning its contractual interest rate. Consequences to loss in value of your shares. All of these consequences are encoded into myriad unique contracts- your lease agreement, the mortgage agreement, etc.
There fundamentally is no standardization across these agreements. There is no central registry of all of these relationships and dependencies.
There can't be, operationally, as they change in real time, and there can't be theoretically, as maintaining one would violate so many principles of privacy and autonomy and freedom and so forth.
Finally, we also live in a world where flows are dependent on work, of various kinds- underpaid and -valued work often performed by women and POC, overpaid and overvalued often performed by high status white men. All, nevertheless, work.
When work stops, but flows must continue, what do we do?
- romwell 6y ago>When work stops, but flows must continue, what do we do? Pay people to keep these flows going, like all other countries did?
- x0x0 6y agoYeah. Other countries have had success with putting the cash in at the leaves of the dependency graph (ie the businesses) with the requirement to continue payroll. Then the rest of the relationships already exist, so the cash flows through. Or we can destroy our economy. I suspect there will be a short delay between widespread rent payment failures and contamination of the banks. By then, we're all gonna be on the ride for the duration. Not feeling so optimistic today.
- hcurtiss 6y agoThere's no free lunch. The government money has to come from somewhere too. Otherwise, inflation.
- jdashg 6y agoWe can eat some inflation, and it's worth remembering that the developed world has trouble with underinflation these days, so adding inflation isn't a negative in the short term.
- dia80 6y agoStill waiting for the inflation from the last crisis.... You 100% sure it's coming?
- paloaltokid 6y agoI think you might be misunderstanding the parent's point. The inflation is already here! Indeed, inflation is how the economy is managed. As much as inflation sucks, economists would way rather have that as a problem than deflation.
- centimeter 6y agoThe US has its “exorbitant privilege” - a pretty thick buffer of seignorage profits it can extract without running into hyperinflation. This buffer is substantial, but finite.
- hcurtiss 6y agoI think it's hilarious your comment was downvoted. Plainly it's finite. Otherwise, we'd just live on printed money forever and nobody would have to work anymore. What could go wrong?!
- brandmeyer 6y agoInflation would distribute the losses along the entire chain. That doesn't sound so bad right now.
- jonahbenton 6y agoI agree, 1000%.
- redler 6y agoExactly. Covering wages would have been a great investment -- preserving countless businesses that would be irreplaceable, or infeasible to start again. As life resumed, the businesses would be right there, immediately ready to go, serve their markets, pay their workers, pay their taxes, pay their landlords, preserve the equity of their owners, and resume community roles. Instead they're gone forever -- because such an approach is seen by a substantial cohort of Americans as an undeserved handout and moral hazard.