Probably ironically banks will be able to make even more money as people pull into credit lines to go over this hump
Constructor Bill now can’t pay. Bob’s Drywall is a creditor and is on the hook for a product he already shipped. Now Bob’s Drywall Supply can’t pay the company that provided him with Net 90 terms.
So Bob and Bill are now insolvent. And they fire their employees.
Suggesting that creditors somehow deserve “pain,” is just cruel. Creditors don’t “inflict pain” on people — they provide capital to people with a reasonable expectation of getting paid back. Of course I don’t care much about the Payday Lender/predatory lenders so much, but suggesting that creditors deserve some sort of payback is ridiculous. The vast majority of businesses rely on credit, without credit, you would have an economic collapse. And they aren’t the “least important” parties — they are the most important because they’re the ones providing the capital for businesses to operate.
Now, of course, what of Construction Materials, Inc? Surely they buy the raw materials from someone and ...so on. Everyone does - or should do - the same: don't adjust the terms, simply accept that the past due items are past due and will be paid a bit later than normal.
Eventually it will hit a bank or large financial institution, and they ought to do the same: accept the situation and wait. It's costly when businesses go bankrupt and everyone knows that this situation is affecting everyone else and will blow over in about six weeks.
If bubble up economics becomes a thing I want full credit.
If the 700 billion dollars for quantitative easing went to 200 million U.S. adults, that'd be $3,500 apiece. If spent at the rate of $700 a week, that'd be five weeks' worth.
We've built everything with growth as an underlying assumption with no ability to pause things and focus on essential services for a month or two and then start back up.
