I’m not well versed in economics by any stretch of the imagination. But I am confused with certain measures taken thus far by the government.

There is currently a temporary shutdown of vast sectors of the economy now and workers affected are not receiving any income.

To me, logic would dictate that here should also be a temporary cessation of payments for rental properties (for small businesses as well as individuals) and, to be fair, a temporary cessation of payments for loans for owners of those properties. In turn, banks would be given temporary cessation payments for interest to its customers since the banks would not receive any payments on loans including payments on mortgages from homeowners. That would essentially close the loop on money flow which again would be temporary and the impact to the greater economy would be limited.

If undue burden is placed on any one of these points in the cycle, and right now, workers and small businesses are taking that brunt, then there could be long-standing damage to the economy from bankruptcies, foreclosures, etc.

The Fed is already addressing the banking side of things by keeping rates close to 0.

Why can’t the government step in to make sure the whole loop is closed off? I don’t get it.

  • 1
    $\begingroup$ Read more news. CARES Act, sba.gov/disaster-assistance/coronavirus-covid-19 etc. $\endgroup$
    – Fizz
    Apr 16 '20 at 18:14
  • $\begingroup$ There’s a lot of extraneous information in this question. The substantive part of it is: can the government push for a standstill in mortgage/interest/rent payments? That’s actually a legal question, not an economic one. People have suggested such a policy, but it is unclear whether it can be implemented. $\endgroup$ Apr 17 '20 at 22:02

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