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Igel

(37,483 posts)
9. Word is precisely that.
Sun Apr 5, 2020, 08:41 PM
Apr 2020

At high-level meetings between governments, that's what's acknowledged. But you don't tell a panicked populace that.

In the end, even those whose jobs can be done by home rely on a lot of people spending money. If half the population doesn't have income, that's half the tax base (or more), either from their taxes, income taxes, or corporate taxes.

Government employees will have to be furloughed; remaining industries won't be able to keep their staff as they cut production. It'll look like a depression as everything winds down.

The option of just sending out money means either the government borrows a lot or eats into what's stored somewhere. It sounds great, "The rich have $30 trillion, take it"--but it's not cash. It's assets, often liquid. If you want to sell 10 skyscrapers in NYC while taxing the people who'd buy them, nobody'll have money to buy them at list price. Suddenly they're not worth what they were. Same for stock. Other land. Anything, really--the government collects 10% of it and tries to sell it, it'll be the very rich who would be buying it ... but they're the ones taking a haircut, so they won't be buying. Assets will depreciate and whoever has cash will buy things up for pennies on the dollar.

That $30 trillion (or whatever it currently is) won't be worth $30 trillion. Government'll chew through capital. Then there won't be capital for getting things started again.

Or the government can just borrow. At some point the interest rate goes up. We pay 8.7% of the federal budget for interest now. A year of having the government continue to borrow to keep things afloat, and we're Greece from 7 years ago. Or, worse, since all governments are doing it there's nobody liquid enough to actually buy the bonds. Then what?

That would leave we just printing the money. But then we're Venezuela. Some people like that--some government folk are well off, but inequality is at a low because everybody's improverished.

Recommendations

0 members have recommended this reply (displayed in chronological order):

Bwahahahahaha! dhol82 Apr 2020 #1
Why is this funny? Ace Rothstein Apr 2020 #13
Right? Calculating Apr 2020 #20
There have been some really disturbing posts and threads here the last few weeks. Ace Rothstein Apr 2020 #23
It's called irony dhol82 Apr 2020 #29
This is worse than 2008. BigmanPigman Apr 2020 #2
This Will Definitely Be Worse Than 2008 Indykatie Apr 2020 #5
I was convinced it was too, until I saw this graphic ffr Apr 2020 #11
This gives new meaning to the phrase, BigmanPigman Apr 2020 #18
Even healthcare workers are being furloughed. Farmers are pouring out milk. Hoyt Apr 2020 #3
What is the reasoning to send home healthcare workers? Volaris Apr 2020 #7
Think about all the things under "healthcare." Igel Apr 2020 #8
Fair enough argument, and an acceptable form of 'triage', if you will. Volaris Apr 2020 #10
While CV19 is in news, a big chunk of medical care is languishing. Many Medical practices are closed Hoyt Apr 2020 #14
That's understandable, but those people are still useful. Volaris Apr 2020 #17
Vast majority of hospitals aren't overrun. If needed, a hospital could move Hoyt Apr 2020 #19
Ok you all talked me down. Good job!! :) Volaris Apr 2020 #21
I work in healthcare - 10% pay cut starting tomorrow FreeState Apr 2020 #12
Thank you for the post and attitude. A number of big health systems have cut pay 20% across board. Hoyt Apr 2020 #15
a furloughed restaurant employee can't pay their rent: prop taxes not paid, apt managing employees Demovictory9 Apr 2020 #4
Which is why the lockdowns won't go on until there is a vaccine. Ace Rothstein Apr 2020 #6
Word is precisely that. Igel Apr 2020 #9
We are not close to reopening, but glad to finally see some rational posts. Hoyt Apr 2020 #16
If I show antibodies, I'll give plasma. roamer65 Apr 2020 #24
+1. Hoyt Apr 2020 #25
I really think I had this bug in early January. roamer65 Apr 2020 #26
I'm hoping I've had it, but more likely allergies. A widely available Hoyt Apr 2020 #27
The dry cough I had for a solid 3 weeks is usually indicative of viral pneumonia. roamer65 Apr 2020 #28
Exactly Calculating Apr 2020 #22
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