[danpat]

The difficulty is in deciding what needs to "stop". Do you "stop" rent payments when those businesses aren't allowed to operate? If yes, do you "stop" loan payments for landlords who depend on rent to repay loans? What about landlords who only half depend on rent for loan payments?

This is why it's an economic problem - it's easy enough to determine which physical activities need to stop to reduce disease spread. It's much much much harder to untangle the interrelated economic activity and decide where pauses should be made. There isn't a clear delineation between people whose economic activities are unaffected, and those who have been brought to a sudden stop.

[vkou]

> The difficulty is in deciding what needs to "stop". Do you "stop" rent payments when those businesses aren't allowed to operate? If yes, do you "stop" loan payments for landlords who depend on rent to repay loans? What about landlords who only half depend on rent for loan payments?

Someone's going to end up getting left holding the bag, and it's going to suck for them, and it's not going to be fair. Life isn't fair. There's going to be edge cases, and those edge cases won't be dealt with correctly, but we can't let the perfect be the enemy of the good.

I think the ROI on letting shuttered businesses keep existing in limbo is better than the ROI on making sure lenders and landlord-owners get paid... Because the businesses, not the lenders are the engines of the economy.

The current approach to bailouts/economic aid does little but funnel government money directly from taxpayers into the pockets of landlords and lenders. It's miles better than letting everyone starve to death, but it's the least good of the options that we have.

[eightysixfour]

> Someone's going to end up getting left holding the bag, and it's going to suck for them, and it's not going to be fair. Life isn't fair. There's going to be edge cases, and those edge cases won't be dealt with correctly, but we can't let the perfect be the enemy of the good.

I think you underestimate how big the edge case of "landlord" is and exactly how that would play out. There are more than 50 million commercial properties in the United States and most of the owners have loans against those properties. If we don't bail them out, those loans don't get paid, and then the bank doesn't get paid, if the banks don't get paid, they gain a bunch of assets that no one can afford and go belly up, which we already decided in 2008 is not an outcome the system can tolerate.

There's no "buck stops here" that doesn't end with lenders because our system is built in such a way that debt is the leverage we use to build wealth. As long as that is the case, we either have to choose between unwinding the system and a hitting rock bottom that may not be recoverable or bailing people out and spreading the cost via taxes and inflation.

Trying to target the pain to a specific class of people is nearly impossible in our system, it is giant and interconnected and someone will profit off of that, and it will almost never be the "little guy."

[vkou]

Why would nobody buy loans that missed/deferred a few monthly payments during a government-ordered pandemic shutdown?

Lenders charge interest on these loans. This interest is earned, because not all loans are expected to pay back in full.

If this were applied across the board, lenders would probably find it far preferable to a complete collapse, where instead of loans that missed/deferred some payments, they found themselves owning a pile of distressed assets, all at once, in the middle of an economic catastrophe.

[eightysixfour]

> Why would nobody buy loans that missed a few monthly payments during a government-ordered pandemic shutdown?

Because it won't be a few monthly payments, it will be a lot of them, and where are the buyers going to borrow the money from? The banks that have no money because of the defaults?

> The lenders get interest on these loans. This interest is earned, because not all loans are expected to pay back in full.

Sure, but it is also not expected that so many will not be paid back either. You can make an argument that the system needs more buffers for black swan events (which have their own costs), and that is totally fair, but we don't have them and now we have to decide what to do.

I say all of this as someone that was "laid off" last week as part of a contingent workforce for a travel industry business that is likely to get a significant bailout from the federal government. Despite that, they will be unlikely to bring back contract labor for a year or more until their feet are under them again. The whole system is connected and is currently failing, the notion that we're going to come back to anything close to normal in the short term is absurd.