Economics question: Would suspending ALL loans and rent help keep the wheels on?

[Revoltingest]

We'll, my wife will probably keep her part time role, but be moved from mental health oversite to active ward nursing. I'll probably lose my job. So does her subsidizing me count?

Wives subsidizing husbands is what is best in life.
Sorry, Conan....I'm more the kept man than a warrior.

In any case, I was talking about what's happening here (mortgage repayment pauses being offered by at least a few banking institutions). Not sure what that has to do with 'businesses', but you could send all the rent notices out you like...you'll have trouble collecting in a nationwide unemployment spike.

Voluntary accommodation of customers' cash shortages is fine.
I do that.
I object to the proposal that government impose rent & loan
payment holidays. Without income, how would I pay workers?
How would I pay for utilities, supplies, insurance, taxes, & fuel?
Without income, the snow won't be plowed, power will be cut off,
maintenance would stop. Tenants would be renting for free, &
getting what they pay for.

 

[Revoltingest]

One effect to consider is that during such a freeze and for some time after it would be difficult or impossible to get a loan, and this might also cause rents to rise. It would need to be a very short freeze, because it would stop many new projects and investments. Suppose that a store needs to get a loan in order to get more supplies, but it cannot get the loan. Suppose a farmer needs a loan for seed. You can see there could be a downside to freezing all loan payments and rent payments.

You're saying there could be deleterious unintended consequences?
Pish posh!
I was thinking along the same lines. If I lost all rent & loan income,
I'd have to borrow on a line of credit to keep things going. But that
line of credit would disappear if the bank couldn't collect repayment.

 

[icehorse]

saw a recent documentary about how the rich get rich
so ….no
the interest will pile up
and when the economy is declared....'well enough'
the bill will be waiting for you

Such a suspension could be done WITHOUT having interest pile up. In other words, a TRUE suspension.

==

It seems that a lot of the pushback in this thread is based on the assumption that "everything will be okay". I suspect that everything will NOT be okay and that we're going to have to find ways to keep society from collapsing. @Revoltingest - if society collapses, your rental income is gonna take a big hit, as is my income, and everyone else's.

During this shelter in place period of time, millions, probably tens of millions of people are going to lose some or all of their income. trump's plan of sending some families $3000 shows extremely ignorant, short-term thinking on the part of the administration. It sounds - from the little I've heard - that the Aussie-stralian government is being much more far-sighted than the U.S. (Not a surprise.)

The OP was proposing installing a sort of "pause" button on the economy. While we're all hunkered down, we shouldn't be accumulating more debt. We all need to stay in our homes, stay warm, and have enough to eat. It seems like most everything else might need to go on hold.

 

[Shad]

What I was wondering is if a simple suspension of all loans and rent payments might minimize the pain all around?

It would kill any related business that isn't making huge profits which relies upon loans and rent for income to pay bills which are not suspended; Water. electricity, etc.

 

[Revoltingest]

Such a suspension could be done WITHOUT having interest pile up. In other words, a TRUE suspension.

==

It seems that a lot of the pushback in this thread is based on the assumption that "everything will be okay". I suspect that everything will NOT be okay and that we're going to have to find ways to keep society from collapsing. @Revoltingest - if society collapses, your rental income is gonna take a big hit, as is my income, and everyone else's.

Your proposal would exacerbate the collapse.
There are repercussions you've not addressed....
If I'm to receive no rent or loan payments, I'm out of money,
& cannot pay bills, eg, utilities, loans, maintenance, workers.
People will lose jobs. Rental units will become uninhabitable.
Necessary borrowing will become impossible. You want that?

Why not argue for government assistance for tenants & borrowers
in need? That would address everyone's problem, & without
imposing the entire burden upon a few hated (by the left) businesses.

During this shelter in place period of time, millions, probably tens of millions of people are going to lose some or all of their income. trump's plan of sending some families $3000 shows extremely ignorant, short-term thinking on the part of the administration. It sounds - from the little I've heard - that the Aussie-stralian government is being much more far-sighted than the U.S. (Not a surprise.)

What Aussie policies do you prefer?

The OP was proposing installing a sort of "pause" button on the economy. While we're all hunkered down, we shouldn't be accumulating more debt. We all need to stay in our homes, stay warm, and have enough to eat. It seems like most everything else might need to go on hold.

Your "pause" would cause cessation of essential services I've noted above.
It seems that you don't care if we lenders & landlords survive. But if we don't,
there would be consequences you'd find unacceptable...once you discovered'm.

 

[Thief]

Such a suspension could be done WITHOUT having interest pile up. In other words, a TRUE suspension.

==

It seems that a lot of the pushback in this thread is based on the assumption that "everything will be okay". I suspect that everything will NOT be okay and that we're going to have to find ways to keep society from collapsing. @Revoltingest - if society collapses, your rental income is gonna take a big hit, as is my income, and everyone else's.

During this shelter in place period of time, millions, probably tens of millions of people are going to lose some or all of their income. trump's plan of sending some families $3000 shows extremely ignorant, short-term thinking on the part of the administration. It sounds - from the little I've heard - that the Aussie-stralian government is being much more far-sighted than the U.S. (Not a surprise.)

The OP was proposing installing a sort of "pause" button on the economy. While we're all hunkered down, we shouldn't be accumulating more debt. We all need to stay in our homes, stay warm, and have enough to eat. It seems like most everything else might need to go on hold.

ain't heard anything about car payments

any thing?......any one?

 

[Thief]

credit cards?

 

[icehorse]

ain't heard anything about car payments

any thing?......any one?

Isn't that also... a loan?

 

[icehorse]

If I'm to receive no rent or loan payments, I'm out of money,
& cannot pay bills, eg, utilities, loans, maintenance, workers.

@Revoltingest - zoom out a little bit here dude! Okay, let's say that while we hit the "pause" button on the economy, we provide a UBI to cover food and utilities. So everyone has a place to live, and food and warmth, AND no additional debts are accruing.

I'm not claiming that this is any sort of perfect solution, I'm trying to discuss a way for us all to get through this, mostly intact.

So, you seem to be very concerned with how the bankers will do under this plan. Well, their loans would be suspended as well. And they will get to keep their fancy houses and have food to eat.

 

[Revoltingest]

@Revoltingest - zoom out a little bit here dude!

I'm the one looking at the larger picture.
To understand it, one must look at how individual businesses
function, & how they'd be affected by your proposal.

Okay, let's say that while we hit the "pause" button on the economy, we provide a UBI to cover food and utilities. So everyone has a place to live, and food and warmth, AND no additional debts are accruing.

With such govenment assistance, there's
no need to hit your pause button.
The economy needn't grid to a halt.

I'm not claiming that this is any sort of perfect solution, I'm trying to discuss a way for us all to get through this, mostly intact.

Your proposal is not merely imperfect, it's horrible.

So, you seem to be very concerned with how the bankers will do under this plan.

I'm looking at how everyone can fare well, not just bankers.
And you miss the fact that a great many lenders aren't banks,
eg, insurance companies, equity firms, investors, me.
I get the impression that you just want to punish banks,
regardless of the consequences.

Well, their loans would be suspended as well. And they will get to keep their fancy houses and have food to eat.

You seem to treat this as just class warfare, eg, resenting lenders having "fancy houses".
If I have no income from rent or loans, then I can't pay bills.
What do you think will happen if I don't pay workers, suppliers, utilities, insurers, etc?

Here's an idea...
I'll bet that you have a 401K, IRA, or some savings towards retirement.
You could donate all your income to help those in need.
This is a much better idea than government forcing me to do it.

 

[icehorse]

You seem to treat this as just class warfare, eg, resenting lenders having "fancy houses".
If I have no income from rent or loans, then I can't pay bills.
What do you think will happen if I don't pay workers, suppliers, utilities, insurers, etc?

What bills will you have to pay? your workers won't be able to work, they will be sheltering in place. your insurance is a type of loan that would also be suspended. i just covered utilities...

 

[Revoltingest]

What bills will you have to pay?

Utilities (gas, water, electric, internet) for tenants' residences.
Bills for maintenance, eg, furnaces, roofs, vehicles, locks, doors (I have hundreds of doors).
Insurance, property taxes, income taxes,

your workers won't be able to work, they will be sheltering in place.

Ever heard of "essential services"?
Suppose a furnace fails...we see frozen & burst pipes this time of year.
I've had it happen.
Even a running toilet can generate thousands of dollars in between billing periods.
I've had it happen.

your insurance is a type of loan that would also be suspended. i just covered utilities...

Insurance is not a loan.

Instead of suspending my income, why don't you just donate all of yours to those in need?
Certainly, if you can expect me to give up all of mine, then you can give up all of yours, eh.
Are you? But if not, why should you get to keep your income?

 

[icehorse]

Utilities (gas, water, electric, internet) for tenants' residences.
Bills for maintenance, eg, furnaces, roofs, vehicles, locks, doors (I have hundreds of doors).
Insurance, property taxes, income taxes,

Ever heard of "essential services"?
Suppose a furnace fails...we see frozen & burst pipes this time of year.
I've had it happen.
Even a running toilet can generate thousands of dollars in between billing periods.
I've had it happen.

Insurance is not a loan.

Instead of suspending my income, why don't you just donate all of yours to those in need?
Certainly, if you can expect me to give up all of mine, then you can give up all of yours, eh.
Are you? But if not, why should you get to keep your income?

There is a good chance that my income will also be suspended.

 

[Revoltingest]

There is a good chance that my income will also be suspended.

But until then, why are you keeping it?
You aren't justifying why government should
suspend all my income, but not all of yours.

 

[icehorse]

But until then, why are you keeping it?
You aren't justifying why government should
suspend all my income, but not all of yours.

You have a relatively rare situation. I suspect there would be a way to handle it. My proposal is meant to address large segments of the population. MOST PEOPLE are paying rent or mortgages. A FEW people are landlords. I don't think we should ignore landlords, but it seems like job one is to keep people in their homes.

 

[Revoltingest]

You have a relatively rare situation.

Not that rare in my circle.
But my situation only illustrates the larger issues.
Suppose a big bank gets no loan payments. How
do they pay for their workers & facilities?
If they cannot staff their operation, how do people
access their money?
You'd crash the economy for everyone,
ie, your cure is worse than the disease.

I suspect there would be a way to handle it.

I proposed it, ie, have government assist those in need.
Then commerce proceeds relatively unimpeded, other
than quarantines & social distancing.
There's simply no need for your dysfunctional proposal.

My proposal is meant to address large segments of the population. MOST PEOPLE are paying rent or mortgages. A FEW people are landlords. I don't think we should ignore landlords, but it seems like job one is to keep people in their homes.

But your proposal would unnecessarily destroy what you think are
small segments of the population. Do people lose rights, & deserve
to lose income just because they're small in number?
And you've not addressed the consequences of these companies not
being able to pay their bills. With no income & no ability to borrow,
workers will lose jobs, rental units will become uninhabitable.

You keep making it about some people/companies giving up their income.
You're generous with other people's money, but it will run out.
Why don't you offer your income while you still have it?

 

[metis]

What I was wondering is if a simple suspension of all loans and rent payments might minimize the pain all around?

I think this may have to be done because many millions of people in the U,S, alone that are going to be suffering from loss of income, plus there may be a need to eliminate such debts to give our economy a jump start after the "dust" settles, which is probably at least several months, not just weeks, away.

BTW, there is some biblical justification in that under Jewish Law, if my memory is correct, as debts are forgiven after seven years.

 

[Revoltingest]

I think this may have to be done because many millions of people in the U,S, alone that are going to be suffering from loss of income, plus there may be a need to eliminate such debts to give our economy a jump start after the "dust" settles, which is probably at least several months, not just weeks, away.

BTW, there is some biblical justification in that under Jewish Law, if my memory is correct, debts are forgiven after seven years.

You can keep your biblical & Jewish justifications for thinking
that I must give up my income, but you get to keep yours.

I am amazed at the rampant greed from those who would
have someone else make the sacrifice that they themselves
would not. They eschew government assistance to those
in need, in favor of taking from classes they don't care for,
all while giving no thought to the consequences.

 

[icehorse]

I am amazed at the rampant greed from those who would
have someone else make the sacrifice that they themselves
would not. They eschew government assistance to those
in need, in favor of taking from classes they don't care for,
all while giving no thought to the consequences.

We're trying to have a complex conversation here. Stop strawmanning us. In this case at least, your powers of extrapolating what we mean are very weak, and based on bad assumptions.

 

[Revoltingest]

We're trying to have a complex conversation here. Stop strawmanning us.

Do you know what a strawman is?
You're proposing taking all the income from some of us,
& giving it to some others of us. This is not generosity,
nor does it fix the problem. It would worsen things.

You'd keep your income. You'd give mine away.
Is there any word other than "greed" to describe
your proposal?