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

[Shad]

why the tone dude? get over yourself.

The tone is because you have ignored what I posted to attack a strawman from your head. Demanding I defend your strawman. You get tone because you are not reading posts. Try again son. Perhaps try reading what I post instead of whining when caught babbling about your fantasy. You did it with Revoltingest too. Do note you do not acknowledge your strawman at all. You just focus on tone because you became emotional over the tone not the substance of the post dismantling your assertion

Yawn.

 

[Heyo]

None of which formed in the middle of a crisis. Like I said saying nationalize it is not an argument. Try again.

Formed in the middle of a crises? Since when is that a criterion?

None of which were formed in a crisis nor say how nationalizing an industry will resolve this crisis. Try again.

Again: why is that relevant?

Assertion. You are assuming the best case scenario based on nothing.

Based on precedent.

Irrelevant.

It is the central point.

Assertion.

Verified by your reaction.

Read my post and what I was replying to again then try again.

Again not created in a crisis nor does anything indicate nationalization was to resolve a crisis. Try again

Yawn. You have no argument for how this will resolve the crisis. You merely assert it will. Yawn. Try again

You have completely lost track what this thread was about.
The question was simply if there was a third alternative to letting a company go bankrupt or unconditionally give the company bail out money to avoid bankruptcy.
The reason why we don't want the bankruptcy is to save the jobs.
An additional nice-to-have would be to avoid having to do it all over again in 12 years.

Nationalization would save the jobs. Do we agree on that?

Nationalization could potentially be a cheaper alternative to just giving the bail out money away since the government has now the company as an asset. If it becomes successful again the stock can be sold at a profit. If it doesn't, the effect is the same as if the bail out money was just given away.
Do we agree on that?

The only goal of a capitalist company is to make money for the shareholders. A nationalized company can formulate additional goals, e.g. job security for the workers.
Do we agree on that?

 

[Dan From Smithville]

Sure, we'd like to grow the economy. but many businesses are being forced to shutdown, and many people are being suspended or laid off. It doesn't seem like subsidies would last for long, and ultimately it seems like the subsidy approach is - once again - mostly benefitting the loan holders, no?

Landlords employ people either as direct employees or temporary contractors. If their income is turned off they cannot pay those employees and would have to suspend or terminate employment. Those employees would need their debts suspended too and it would just keep going along the chain of the economy.

Suspension of loan repayment could have a similar ripple effect too.

Bankers and landlords have bills too. Government help might be the best way to deal with it. individuals and financial institutions that have the means can support civic responsibility too if they choose to. Several big companies are helping by providing bonuses to their employees that are necessary for continued operation during this crisis. All that helps.

 

[Dan From Smithville]

That's always a problem.
We try to work with those who'll recover
from temporary financial embarrassment.

I've already said that government has a role in assisting people.
That's far better than depending upon businesses to do it...for
the reasons I've stated.
If businesses bear the burden, & don't survive, there go the jobs.

I have a proposal....
How about employees & contractors work for
reduced pay or no pay to help their employers.
Then I won't lose my home.

I am not very fond of your suggestion. Of course, if banks and creditors stop demanding payment, your home would be safe until the end of that rope was reached and they started losing their homes.

 

[Revoltingest]

I am not very fond of your suggestion.

That's good.
I intended it to be a very bad suggestion.

 

[icehorse]

The tone is because you have ignored what I posted to attack a strawman from your head. Demanding I defend your strawman. You get tone because you are not reading posts. Try again son. Perhaps try reading what I post instead of whining when caught babbling about your fantasy. You did it with Revoltingest too. Do note you do not acknowledge your strawman at all. You just focus on tone because you became emotional over the tone not the substance of the post dismantling your assertion

Yawn.

Yawn is right. Your powers of mind reading are weak at best, see ya around dude.

 

[icehorse]

Landlords employ people either as direct employees or temporary contractors. If their income is turned off they cannot pay those employees and would have to suspend or terminate employment. Those employees would need their debts suspended too and it would just keep going along the chain of the economy.

Suspension of loan repayment could have a similar ripple effect too.

Bankers and landlords have bills too. Government help might be the best way to deal with it. individuals and financial institutions that have the means can support civic responsibility too if they choose to. Several big companies are helping by providing bonuses to their employees that are necessary for continued operation during this crisis. All that helps.

Well that's exactly what I'm trying to explore - the very ripple effect you're mentioning. Again, that's why I said ALL loans and rent. Everybody's! Yours, mine, your landlord, your banker, their bankers, all the way up, down, and across.

 

[Cooky]

Well, I'd be completely broke.
That would please many here.
You sure have a lot of really bad ideas.

Btw, I work with my troubled tenants & borrowers.

Being broke isn't the end of the world. There are food banks and things.

 

[Cooky]

Is eating the rich in the table yet? No? I'll come back then. *wheels out the guillotine.*

In seriousness though any landowner who kicks their tenants off during a disaster for reasons of default should be thrown in jail, and the property possessed by the government to act as public housing.

Ditto to banks who try and repossess.

My landlord said they were sending me to collections and gave me 3 days to vacate last week. They were cold as ice.

...So I decided to be be even later on my payment, even though I have more than enough money to pay. Paybacks are a *****.

Hey, that's what they get for threatening to throw my family out in the middle of a ******* pandemic..!!

 

[Revoltingest]

Being broke isn't the end of the world. There are food banks and things.

Still, anything which breaks one financially should be avoided.
That was the point of the OP....albeit for some & not others.

 

[icehorse]

Still, anything which breaks one financially should be avoided.
That was the point of the OP....albeit for some & not others.

What bills do you have @Revoltingest ? Because if you have any outstanding loans yourself, the OP is proposing that they also would be paused. So what's left? Food, utilities... ? Maybe paying repairmen? Well ultimately repairs are necessary, but they can mostly be paused as well. This is not an easy proposal, but the context is keeping the economy from totally imploding.

 

[Revoltingest]

What bills do you have @Revoltingest ? Because if you have any outstanding loans yourself, the OP is proposing that they also would be paused. So what's left? Food, utilities... ? Maybe paying repairmen? Well ultimately repairs are necessary, but they can mostly be paused as well. This is not an easy proposal, but the context is keeping the economy from totally imploding.

I won't be venturing much personal info, except to say I'm down
to just a couple loans. To suspend all loan & rent payments is
not sustainable....unless you propose also that utility companies
give me free utilities, stores give me free supplies/groceries, my
workers continue for free, insurance companies give me free
coverage, gas stations give free gasoline, etc, etc.

Of course your proposal is easy....but only for you.
You won't suspend your own income. And you
propose that all my workers no longer be paid.
They too dislike your 'generosity' towards my
borrowers & tenants.

 

[Terrywoodenpic]

Well, I'd be completely broke.
That would please many here.
You sure have a lot of really bad ideas.

Btw, I work with my troubled tenants & borrowers.

I suspect that they should just suspend the financial clock.
It would seem to hurt "Income" But maintain business until the clock was restarted.

New business, new debts and payments for new purchases could continue, but anything preexisting would be frozen.
No foreclosures or evictions could take place.
Rents and the like would be frozen at the same time, so would mortgages and taxes and other payments by land or property owners or businesses.

It would in financial terms, be like that the interim time period did not exist.

In such a scenario no business would fail but, neither would it make real losses or profits. we would all be effectively working for nothing.
The Government would need to refund the cost of the resources used in this period out of future taxation.
but in other respects little damage would be done.

 

[Revoltingest]

I suspect that they should just suspend the financial clock.
It would seem to hurt "Income" But maintain business until the clock was restarted.

New business, new debts and payments for new purchases could continue, but anything preexisting would be frozen.
No foreclosures or evictions could take place.
Rents and the like would be frozen at the same time, so would mortgages and taxes and other payments by land or property owners or businesses.

It would in financial terms, be like that the interim time period did not exist.

In such a scenario no business would fail but, neither would it make real losses or profits. we would all be effectively working for nothing.
The Government would need to refund the cost of the resources used in this period out of future taxation.
but in other respects little damage would be done.

How about just suspending money transactions?
Workers continue working without pay, but businesses
would give them products for free.
No one would pay taxes, loans, rent, or anything.

Somehow...somewhere...there's a fly in that ointment,

 

[Terrywoodenpic]

How about just suspending money transactions?
Workers continue working without pay, but businesses
would give them products for free.
No one would pay taxes, loans, rent, or anything.

Somehow...somewhere...there's a fly in that ointment,

the Flies in the ointment are that it would only work for a limited period of time, because resources are continuing to be consumed.
and they must be paid for eventually.

However there are already several million British volunteers already working for free in the UK.
But the Government is paying their employers 80% of their previous wages in the mean time.
It is true there are some gaps in the safety net, that the government is still trying to close.
The majority of small businesses are shut down.

 

[Revoltingest]

the Flies in the ointment are that it would only work for a limited period of time, because resources are continuing to be consumed.
and they must be paid for eventually.

And there's the remote possibility that if no one has to pay for
anything, they just might could take more than they need,
thereby causing shortages & waste.

However there are already several million British volunteers already working for free in the UK.
But the Government is paying their employers 80% of their previous wages in the mean time.
It is true there are some gaps in the safety net, that the government is still trying to close.
The majority of small businesses are shut down.

Voluntary measures are so often best.

 

[Dan From Smithville]

Well that's exactly what I'm trying to explore - the very ripple effect you're mentioning. Again, that's why I said ALL loans and rent. Everybody's! Yours, mine, your landlord, your banker, their bankers, all the way up, down, and across.

The ripple effect I mention would be negative rather than positive.

Completely shutting down all rent and loans wouldn't be a ripple effect. It would be a shock effect and it would take so much out of the economy so quickly the effect would be negative too. What would fill the sudden, large vacuum that would form in the economy?

 

[metis]

When one considers the prognosis of the effect of the pandemic over the next two years, there will definitely have to be made some significant allowances for default on mortgages, loans, etc. How can a family with no, or a sharply reduced income, during this stretch going to pay for past bills and new bills that they will acquire? Get a new job? But new jobs are only going to grow slowly.

Getting into a recession or depression can take place very quickly, but getting out of one can take months to years, leaving a great many people in dire need of help.

Thus, what's more important: our fellow citizens or $?

BTW, did anyone listen to the mayor of Shanghai on Fareed Zakaria's news program yesterday? Straight talking with predictions that are well explained and basically logical economically. Out of a population of 6 million, Shanghai has had only three deaths thus far.

As has been said, the Chinese play chess; the Americans play checkers; Trump plays tic-tac-toe but has to cheat to win.

 

[icehorse]

I won't be venturing much personal info, except to say I'm down
to just a couple loans. To suspend all loan & rent payments is
not sustainable....unless you propose also that utility companies
give me free utilities, stores give me free supplies/groceries, my
workers continue for free, insurance companies give me free
coverage, gas stations give free gasoline, etc, etc.

Of course your proposal is easy....but only for you.
You won't suspend your own income. And you
propose that all my workers no longer be paid.
They too dislike your 'generosity' towards my
borrowers & tenants.

once again, you're strawmanning the proposal - it was only meant to be a temporary suspension. and you're also making bad guesses about my personal situation. why would you think that my income is somehow immune to these society-wide issues?

 

[Dan From Smithville]

That's good.
I intended it to be a very bad suggestion.

The initial suggestion was offered as an idea that might help with our economic problems, but would take money out of the system. Your suggestion just moved that to employees pay that would also remove money from the system.

We do not bleed people today in medicine for much the same reason. Taking blood out of the body is not a good idea.