61–70 of 161 posts
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Businesses were never expected to be able to totally shut down for months at a time. It’s not reasonable to suggest that businesses who can’t handle that have been irresponsible or are less deserving of help.
Well Reddit would certainly disagree with you on that. But I agree with you. I don’t even know why we call them “bail outs” in this case. “Crisis operating grants” would be more accurate.
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You're asking me,(general tax payer) to give you money to ride out the storm, but you get all the private gains in the future while I take the risk now. There is a much more fair way to do this. Firms simply issue new stock and sell it to the market. Firms get the capital they need, the general tax payer isn't holding the bag.
I find it interesting that this entire thread seems to be about fairness. Whether something is fair to corporations/people really shouldn't be the point. It should be about keeping people alive and having a functioning/prosperous economy. I'd much rather have that than a "fair" economy.
A 2.2 trillion dollar check was just signed with the american tax payer's name on it. That is money could have gone to retirements, heath-care, and schools. It is reasonable to be concerned that it go to an equal or better purpose, and not to buy a second yachts for bankers.
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yes, basic consumer goods didn’t see much inflation. But what about housing, education, even stuff like cars and travel. Of course, other factors are at play too, but abundant “cheap” money certainly increase prices of those
The fact that the most common inflation numbers (AFAIK) don't include real estate makes them worthless.
In The Netherlands, our government reserved a special € 100 million for startups, because they are not eligible for the normal relief program because these startups have no revenue and "their succes is measured differently". In the grand scheme of things, € 100 million is peanuts of course. Still I found it baffling. I should also mention these are loans, but if the startups fail the government is still holding the b…
There is no default in the Netherlands, so the entrepreneur is always holding the bag.
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Businesses were never expected to be able to totally shut down for months at a time. It’s not reasonable to suggest that businesses who can’t handle that have been irresponsible or are less deserving of help.
Wimbledon took out a pandemic policy year after year. Turns out they were stupid to do so, they could have invested the insurance premium in the stock market and waited for their bailout.
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Not reasonable, and also not useful. That's probably 90% or 95% of businesses that were not able to pause like that. We're going to want a lot of those businesses. And the ones that are able, some are by luck or circumstance rather than wise design. Should we reward the luck as well as the design? "Don't help them" seems like throwing out ten babies with the bathwater.
I mean, that logic is applied to individuals that for example get sick or simple exist in bad economy. They dont get bailout while consequences on them are disastrous. I think that anger over companies being bailed out with no conditions placed on those money is pretty much about that. Individual get homeless, but the company wont even have to go through bankruptcy and restructuralization. It gets free money instead.
Catch-22
Well, not really: bailouts punish people and business who incurred costs to operate in a way that would allow them to pause their economic activity for months (cancellable supply/rent/employment contracts, cash reserves, etc.), and favors those who did not do so. In general, a society where it is possible to pause all economic activity at any time is going to be much more robust than one that doesn't, and is going to…
Also, food production requires year round economic activity. Pausing for one week would mean mass starvation even if everyone had food stores.
People keep talking about disrupted supply chains but nothing could be further from the truth. Food is widely available as are all needed consumer goods. In my city, restaurant supply companies have shifted to producing direct to consumer boxes in a matter of days. I love to garden and am attempting to grow a lot of my own food because I'm a bit of a prepped, but even I can see that we are not anywhere close to a true SHTF moment. For the most part the economy is operating as normal for necessary goods. Most people can still go to the same store they always do and get everything needed or go o line and have it delivered.
The statement about the lack of inflation from QE and other stimulus programs from 2008 is pretty questionable. There's been little inflation as measured using usual consumer price indices, but the construction of those indices is typically fairly focused on consumer goods and underweights the assets that rich people tend to invest in (stocks, real estate, bonds, etc). The QE and stimulus programs from 2008 were sign…
Formerly Chinese (and sometimes subsidized I suspect) dirt cheap items might become a lot more expensive. Non stick frying pans and pool swim noodles type things. I can't believe that returns exactly to how it has been.
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A virus is no more the governments fault than an asteroid. The shutdown is consequence of the disaster, not a cause. Economic activity would decline substantially regardless of government action.
The shutdown is the government’s fault, period. The damage it is causing is far worse than what would have happened if the government had started taking action in January and ramped up testing capacity. Instead the government did close to nothing and now the lockdowns are the last resort. Other countries handled this better. South Korea and Taiwan are good examples of countries that ramped up testing and did not need…