> 1) Businesses going under is preventable. If a lot of businesses go under, so will banks when those businesses default on debts.
And more businesses will go under with your system. Most businesses that are losing most of their revenue can and have planned for losing revenue for a few months. Businesses can't realistically plan for the kinds of changes you're proposing because in a world where the government can modify by fiat every single contract in the whole world, nothing can realistically be planned. It's a total, forced default. And the specific scheme you're proposing turns every business into a bank - any time anyone owes a payment, you become a lender. This magnifies the effect of all insolvencies - now every business is tangled in a web of credit. It literally is the worst of both worlds - you introduce a shock the same way a large default would and ensure that no one could trust anyone, while also actually adding to the systematic risk by entangling every business in the system of credit. At least mass bankruptcies lead to deleveraging.
This is even if you assume that some sort of super AI can magically modify every contract in the world in such a way to best follow the spirit of what you want and have every party somehow agree with this. In reality, contracts are complicated beasts and you can't just modify one aspect of every contract in the world and expect things to be fine. Contracts are going to have all sorts of contingencies that are going to be highly ambiguous in a world where the government steps in and says certain obligations can be deferred. Again, people not being able to meet their obligations is absolutely nothing new in this world and the system is already designed to deal with this.
> 2) Direct payments would need to be astronomical to protect ordinary people for this duration.
No it doesn't. Keep in mind, it doesn't have to protect everyone from everything. $2000 a month for everyone for 2 months is $4000 * 300,000,000 or roughly 1.2 trillion dollars. This isn't much in the grand scheme of things and you're proposing an intervention of substantially larger magnitude. You can also effectively structure this as a loan for most of the people who don't need it by adding a deferred progressive tax on top of it.
> 3) Loans from the government directly to people and businesses might work if we had the apparatus for it. The critical thing, though, would be to freeze rents and interest if we did that. It'd be a much more complex scheme to implement. If I have a 10 years left on my mortgage, I could get a 10 year loan from the government for the principal, while the bank would lose out on 3 months' interest.
This doesn't make any sense - you're the one who proposed that businesses that are screwed by your scheme could survive by borrowing from the government. Why would that work in your scheme but not here? I don't understand the bit about your mortgage - why would you need to borrow (and why would anyone lend you) more than the payments you need to make for the next couple of months? Any sort of emergency government funding would be a credit line akin to extending payments, not a long fixed-term loan.
Again, I don't see any kind of realistic proposal here - it feels like a word game to come up with a vaguely workable-sounding (to people who don't understand how the economy works) plan that helps specific classes of people at the expense of everyone else.