03-20-2020, 05:12 PM
We need both instant support AND holidays:
Instant support is necessary because we are humans with consumptive biological needs that cannot be holidayed. People need to eat, drink, maintain hygiene, use power (electrical, gas, and oil), have their waste disposed of, and have serious medical issues looked after. For all those things, we cannot wave a magic holiday wand to suspend consumption. Getting checks out ASAP ensures the plurality of Americans who are one paycheck away from insolvency can keep going.
But as Goose said, we also need massive holidays. Holidays for many forms of debt, in terms of deferred payments and interest accrual, including student loans, car loans, mortgages, and rent. The only way you make that work is for the federal government to provide certain guarantees on the front end. This is much easier to wave a wand for federally subsidized student loans and federally operated mortgages, harder for private loans where intermediaries need bridge financing that, as Goose notes, may as often be a subsidy as a zero-interest loan, since the underlying financing is always going to be X number of payments behind all the way down the chain.
Here's something I wonder: is it legally possible and at all feasible to push back due dates on all kinds of debt obligations? For example, if a renter can't pay a landlord for the next two months' rent, which means the landlord is therefore behind two mortgage payments with their banker, and the community bank lender thus has x% more loans "go bad" absent some kind of intervention and y% less capital reserves, would it be possible to simply push back due dates for X weeks/months/payment periods so that it is a true holiday that doesn't count against anyone's liabilities?
Again, that seems easiest in the case of student loans and other liabilities fully within the government's control, and depending on how you interpret Trump's statement about suspending interesting for 60 days, maybe that's what's already happening. But it seems like that would be the easiest way to "unfreeze" everything on the back end, even if it can't possibly come closing to solving it all.
Instant support is necessary because we are humans with consumptive biological needs that cannot be holidayed. People need to eat, drink, maintain hygiene, use power (electrical, gas, and oil), have their waste disposed of, and have serious medical issues looked after. For all those things, we cannot wave a magic holiday wand to suspend consumption. Getting checks out ASAP ensures the plurality of Americans who are one paycheck away from insolvency can keep going.
But as Goose said, we also need massive holidays. Holidays for many forms of debt, in terms of deferred payments and interest accrual, including student loans, car loans, mortgages, and rent. The only way you make that work is for the federal government to provide certain guarantees on the front end. This is much easier to wave a wand for federally subsidized student loans and federally operated mortgages, harder for private loans where intermediaries need bridge financing that, as Goose notes, may as often be a subsidy as a zero-interest loan, since the underlying financing is always going to be X number of payments behind all the way down the chain.
Here's something I wonder: is it legally possible and at all feasible to push back due dates on all kinds of debt obligations? For example, if a renter can't pay a landlord for the next two months' rent, which means the landlord is therefore behind two mortgage payments with their banker, and the community bank lender thus has x% more loans "go bad" absent some kind of intervention and y% less capital reserves, would it be possible to simply push back due dates for X weeks/months/payment periods so that it is a true holiday that doesn't count against anyone's liabilities?
Again, that seems easiest in the case of student loans and other liabilities fully within the government's control, and depending on how you interpret Trump's statement about suspending interesting for 60 days, maybe that's what's already happening. But it seems like that would be the easiest way to "unfreeze" everything on the back end, even if it can't possibly come closing to solving it all.