Seen everywhere in last U.S. crisis, moral hazard is nowhere in this one

Post by Proven » Mon, Apr 13, 2020, 10:49 AM UTC

fountainofage wrote: post #119

anonuser123456 wrote: post #12

Earlier quoted context omitted.

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.

This is the solution. Have the firms issue stock and the government purchase the stock. Obviously make it ultra-preferred with no one else getting preference before the government gets paid. If firms don't like that deal, they can either get their own funding from the private markets or go out of business.

Post by cvlasdkv » Mon, Apr 13, 2020, 2:21 PM UTC

legolas2412 wrote: post #80

twblalock wrote: post #59

Earlier quoted context omitted.

Globalism encourages production of goods in multiple regions which are efficient at the production of a particular product. For example, globalization is why Toyota manufactures cars and car parts in 18 countries, rather than just in Japan. Under localism, Toyota would only manufacture in Japan.

> globalization is why Toyota manufactures cars and car parts in 18 countries, Definitely not. It is because of tax incentives under protectionist policies. A perfect free-market globalized world would actually see cars being manufactured in just one place for maximal efficiency.

Post by cvlasdkv » Mon, Apr 13, 2020, 2:37 PM UTC

crazygringo wrote: post #55

I see so much talk here on about how companies should be left to go bankrupt because of their "shitty decisions", that "the weakest companies should be allowed to fail", and "shareholders have to hold the bag" (all from comments here). This fundamentally misunderstands how businesses work. If your business has a 5% profit margin, and you're supposed to have enough savings to weather, say, six months of essentially fu…

Post by jazzyk » Mon, Apr 13, 2020, 2:55 PM UTC

tatersolid wrote: post #152

yamoriyamori wrote: post #144

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This. The 'race to the bottom', committed globally by central banks, to get to 0% interest rates, and keep them there for the sake of keeping the markets 'up', exacerbated by top level politicians' desires/directives. If there's no cost to borrow, why not keep borrowing? And keep borrowing? And lending? Until things really unwind in a recession/depression that will de-lever everything/everyone. The moral hazard? I tr…

> And in the span of 3 weeks the US has spent $7,000 of every individual's future ($2T / 340M people). You can’t really claim that. The reality in the progressively taxed US is the higher tax brackets pay the overwhelming majority of the total tax bill. In reality, the payback of that $2T will fall on the top taxpayers. So it’s more like $10 for most Americans and $100000+ for the top percentiles. Bezos types will pa…

Post by bobthepanda » Tue, Apr 14, 2020, 1:58 AM UTC

mrosett wrote: post #125

bobthepanda wrote: post #108

Earlier quoted context omitted.

> I also never made the claim that the counterfactual of no stimulus would have been better To be fair, that wasn't the only option. There was the debate in 2007/08 about how much of the stimulus should be monetary vs handouts directly to taxpayers vs infrastructure. There's some who believe that the "infrastructure" portion was too small of the pie, hence the stomach for things like "Infrastructure Week" from Trump…

In the abstract, I liked the idea of spending it on infrastructure, but over the ensuing decade I’ve become deeply skeptical of the ability of the US government to effectively spend more money. California high speed rail and the NY subway are exhibits a and b.