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Hazard pay in focus as essential workers earn less than the jobless

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Re: Hazard pay in focus as essential workers earn less than the jobless

#341

Post by gregwebs »

throwaway373438 wrote: post #330
gregwebs wrote: post #142

Earlier quoted context omitted.

Sorry, it is hard for me to untangle all this. Some of this money is authorized by CARES, and some is independent action. We are already at a trillion dollars to the largest companies now when you combine CARES and the fed's commitment to debt purchase. In June they just committed to deploying an additional $250 billion https://www.wsj.com/articles/fed-will-amass-corporate-bond-p... Add this to the existing billions…

A debt purchase and unemployment are very different things. Unemployment is money given away to another. It's a permanent giveaway. A debt purchase is either money that was given to you, that you're now returning (Treasury securities) or money that you're giving to others which will be returned (corporate bonds). It's not a giveaway at all - the net exchange is $0. These cannot be compared as equivalent. The tax redu…

> A debt purchase is either money that was given to you, that you're now returning (Treasury securities) or money that you're giving to others which will be returned (corporate bonds). It's not a giveaway at all - the net exchange is $0.

The corporate tax reduction is equivalent to a handout since it won't be paid back. As is the paycheck protection program.

I agree that debt is not a 100% handout, but it is definitely not a 0% either. The fed is not that worried about qualifying its purchases and some of these companies will still go bankrupt: those cases may be 100% handouts. The debt is being purchased at above market rates and inflating prices for the asset so that's still a noticeable percentage of handout for the loans that get repaid.

But I wouldn't assume that corporate debt will ever truly get repaid until I see the fed balance sheet go down. They tried to unload just a little bit last year and the stock market went down so they stopped. We now have 1.9 trillion in mortgage backed securities even though the housing crisis is over and housing prices are back to the levels of the prior bubble.

Re: Hazard pay in focus as essential workers earn less than the jobless

#342

Post by adamsea »

NovemberWhiskey wrote: post #267
adamsea wrote: post #247

Earlier quoted context omitted.

'"The word "hunger," the panel stated in its final report, "...should refer to a potential consequence of food insecurity that, because of prolonged, involuntary lack of food, results in discomfort, illness, weakness, or pain that goes beyond the usual uneasy sensation."' "One in seven households with children were affected by food insecurity in 2018." "Food insecurity rates are highest for single mother households a…

Are you agreeing with me? Disagreeing with me? When all you do is quote from a report which has no findings w.r.t starvation it's hard to know. Starvation doesn't mean hunger, it means the process of dying of hunger.

I am disagreeing with you.

My point is that hunger is bad enough and I don’t think splitting hairs between whether the richest country on the face of the earth has starvation or merely hunger is constructive, if we believe that either is unacceptable because of the human pain and suffering and damage they cause. We know hunger exists in America, and that it doesn’t have to.

Re: Hazard pay in focus as essential workers earn less than the jobless

#343

Post by centimeter »

Red_Leaves_Flyy wrote: post #335
centimeter wrote: post #334

Earlier quoted context omitted.

This is probably the (unintentionally) funniest comment I’ve ever seen on this site - you don’t have any coherent understanding of the economics of price controls, so you just go on about Communist China and and the Holocaust. Surely at some level you realize this is embarrassing? > how can we possibly allow these parasites to live on Private charity is and always has been more effective than government welfare, alth…

>This is probably the (unintentionally) funniest comment I’ve ever seen on this site - I'm glad you're having fun. None of these topics are laughing matters, but, like the insults you're throwing, they're not novel either. >you don’t have any coherent understanding of the economics of price controls If you had 'coherent arguments' or citations, you would not lower yourself to attacking me instead of my arguments. >so…

The fact that you clearly don’t understand the difference between an argument and a citation tells us everything we need to know.

Re: Hazard pay in focus as essential workers earn less than the jobless

#344

Post by throwaway373438 »

gregwebs wrote: post #341
throwaway373438 wrote: post #330

Earlier quoted context omitted.

A debt purchase and unemployment are very different things. Unemployment is money given away to another. It's a permanent giveaway. A debt purchase is either money that was given to you, that you're now returning (Treasury securities) or money that you're giving to others which will be returned (corporate bonds). It's not a giveaway at all - the net exchange is $0. These cannot be compared as equivalent. The tax redu…

> A debt purchase is either money that was given to you, that you're now returning (Treasury securities) or money that you're giving to others which will be returned (corporate bonds). It's not a giveaway at all - the net exchange is $0. The corporate tax reduction is equivalent to a handout since it won't be paid back. As is the paycheck protection program. I agree that debt is not a 100% handout, but it is definite…

It's true that bad debt isn't paid back, but in a bankruptcy the investors are wiped out so it would be disingenuous to frame those monies as "corporate bailouts." The funds will have gone to sustaining the business and employing the employees -- not to shareholders.

The tax change isn't a reduction per se, it's a change in the way we account for losses across multiple years. It's also very new -- it's removing a new carryover rule that was added in 2017. I think it's also disingenuous to frame this as a reduction as the losses would be carried forward anyway. It is, like most of the other "corporate handouts," more of a shift in when the money is paid rather than a change in the amount.

Re: Hazard pay in focus as essential workers earn less than the jobless

#345

Post by maerF0x0 »

rovolo wrote: post #265
maerF0x0 wrote: post #108

Earlier quoted context omitted.

https://inflationdata.com/Inflation/images/charts/Inflation_... Seems to me like breaking the gold standard has lead to quite a bit of inflation. One problem with our view of inflation is that it's compounding... Now, I think the real reason we have compounding and printing of money is that it's a form of taxation (on currency holders) and it makes government debt cheaper and cheaper each year that passes.

That graph is misleading because you're plotting cumulative inflation on a linear graph rather than a logarithmic graph. The basic issue is that you should expect every 20 pixels to have the same weight, but you feel the impact of inflation as later/earlier rather than later-earlier. For example, compare 1940 to 1950 with 1990 to 2000. Cumulative inflation rises 110% for 1940-1950 and 450% for 1990 to 2000. But, $1 i…

understood, but the issue with assuming logarithmic expansion is "normal / desirable" is that it hides the fact that exponential inflation is the same as negative compounding returns on cash. With compounding inflation eventually it will take all of the money currently(today) in circulation just to buy a single loaf of bread.

Re: Hazard pay in focus as essential workers earn less than the jobless

#346

Post by gregwebs »

throwaway373438 wrote: post #344
gregwebs wrote: post #341

Earlier quoted context omitted.

> A debt purchase is either money that was given to you, that you're now returning (Treasury securities) or money that you're giving to others which will be returned (corporate bonds). It's not a giveaway at all - the net exchange is $0. The corporate tax reduction is equivalent to a handout since it won't be paid back. As is the paycheck protection program. I agree that debt is not a 100% handout, but it is definite…

It's true that bad debt isn't paid back, but in a bankruptcy the investors are wiped out so it would be disingenuous to frame those monies as "corporate bailouts." The funds will have gone to sustaining the business and employing the employees -- not to shareholders. The tax change isn't a reduction per se, it's a change in the way we account for losses across multiple years. It's also very new -- it's removing a new…

It's a bad outcome to temporarily sustain zombie businesses even if you stop shareholders from benefitting.

Thanks for the correction on the corporate tax reduction.

Re: Hazard pay in focus as essential workers earn less than the jobless

#347

Post by throwaway373438 »

gregwebs wrote: post #346
throwaway373438 wrote: post #344

Earlier quoted context omitted.

It's true that bad debt isn't paid back, but in a bankruptcy the investors are wiped out so it would be disingenuous to frame those monies as "corporate bailouts." The funds will have gone to sustaining the business and employing the employees -- not to shareholders. The tax change isn't a reduction per se, it's a change in the way we account for losses across multiple years. It's also very new -- it's removing a new…

It's a bad outcome to temporarily sustain zombie businesses even if you stop shareholders from benefitting. Thanks for the correction on the corporate tax reduction.

I agree that a business folding is a bad outcome. I think the goal is to have the business not fold at all, paying back the investment. Open question how many businesses will ultimately fold or survive -- no way to know yet, right?

Re: Hazard pay in focus as essential workers earn less than the jobless

#348

Post by gregwebs »

throwaway373438 wrote: post #347
gregwebs wrote: post #346

Earlier quoted context omitted.

It's a bad outcome to temporarily sustain zombie businesses even if you stop shareholders from benefitting. Thanks for the correction on the corporate tax reduction.

I agree that a business folding is a bad outcome. I think the goal is to have the business not fold at all, paying back the investment. Open question how many businesses will ultimately fold or survive -- no way to know yet, right?

Even if the business survives there are bad outcomes. Creative destruction does not occur and moral hazard is increased. I agree that there is a huge benefit to society to avoid a wave of mass bankruptcies, but there are huge costs as well.

Purely from the financial side, another way of looking at this is: if bail outs were really net positive then the private sector would handle it. If the government has to handle it, it is a bail out. Governments almost always lose money on bail outs. Sometimes, like the last one, it is falsely claimed that the government made a profit. It probably lost money [1] and we still have 1.9 trillion mortgage backed securities on the fed's books that are unaccounted for in such claims.

I agree that these things are not a 100% handout, but they are most definitely a bail out.

[1] http://gcfp.mit.edu/wp-content/uploads/2019/02/BailoutsV12.p...

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