The Partisan Divide on Issues

[David Horn]

(04-24-2020, 03:21 AM)Bob Butler 54 Wrote: We seem to have been running on a debit economy.  It wasn’t just your average consumer.  Everybody mortgaged something.  If a factory needed to refurbish it’s equipment, an airline to purchase more planes, a farmer needing next year’s seeds, everybody was in debt.

This of course means, when you cannot meet your regular payments, that the bank own you, and the bank is not capable of running a business.  What they could end up after the Coronavirus problem is lots and lots of worthless stuff.

It is much easier to park a plane which you own than a plane which is mortgaged to the hilt and bleeding money.

Business 101 says leverage is good, every business, individual and public entity authorized to borrow does. And yes, the debtholders get the assets in bankruptcy. I suspect that this will be managed like so many other things. Apparently, the stock marketeers assumes they'll win regardless. God I hope not. We need a reset, and ones coming, one way or another. If we favor the already wealthy, and cover their shorts, things will get worst than nasty and fast.

Bob Butler 54 Wrote:As I see it, we won’t be really ready to recover until we have first lots of testing and PPE, and about a year after the initial infection, a vaccine.  By that time, the banks will own everything, and everything will be worthless.

Recovery may have to be way outside the box.  Part of it will have to be a lot of loan forgiveness.  Part of it is that if you want any sort of government help, you have to contribute something, be it immune employees or vital services or whatever.  Part of it is that some people get huge recompense, whether it be a CEO of a big company or a superstar of a sports league that is not playing.  They have to live like ordinary mortals for a time if their business it to survive, and the government could say if you want help, you have to help.

We can all wish for the mighty to fall -- at least a little. We know that the GOP is all-in for the mighty, so their success will mark our success in reverse.

Bob Butler 54 Wrote:I don’t think the government can keep throwing money around for a year.  I think a lot of stuff will still be necessary.  I doubt Trump will be able to think outside the box.

Anyway, just a preliminary thought.

If you listen to the MMT crowd, we should be monetizing this crisis right from the go. Serious economists of all stripes see us entering deflation, and plumping money into the economy may be the only way out of that.