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Paul
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Economic suspension

April 4th, 2020, 7:23 pm

Might it not be more efficient to suspend all global economies simultaneously? Only keep food, energy, hospital, communications, etc. functioning. Everything else stops. No rent payment, no rent collection, stop all money into and out of banks. Food etc. then delivered to fully locked-down homes. Essential workers work for free in return for, say, zero income tax in the future. 

It might be easier to restart the economy as and when. (At the moment we will find society divided into two groups, those who survive financially and those who don't.) Also the world we come back to would be quite nice, one where essential workers are on zero tax. Obviously not lawyers, then! Or even mathematical modellers in my view!
 
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Alan
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Re: Economic suspension

April 4th, 2020, 11:13 pm

No money into and out of banks would be a catastrophe. 

I think you are trolling on this one! 

If not, I propose a numbered list on why it's a terrible idea. 
 
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Paul
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Re: Economic suspension

April 4th, 2020, 11:17 pm

No, there is no money! Government supplies everything for one month with collaboration of essential worker volunteers. 

(I'm not trolling, honest! Am doing what I often do, laying out an extreme position in a new direction. Optimal solution may lie somewhere between it and where we are. Goal is to find that optimum. It's usually closer to where we are than the extreme, but it throws up some ideas.)
 
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Alan
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Re: Economic suspension

April 4th, 2020, 11:46 pm

Ok. 

The list of why this is a terrible idea

1. Countries trade with each other. They pay with money and use banks. With your plan, how does Govt A "supply" the particular goods to its people that Country A used to buy from Country B?  
 
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Paul
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Re: Economic suspension

April 5th, 2020, 12:15 am

(I did say 'global.')

How much trade is happening now? Much coming in from China? How much is critical? Is having the latest iPhone worth a depression worse than the 1930s? Need versus want. Food + shelter + water + tin opener is where I'm heading!

It's like putting the planet into an induced coma!
 
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Alan
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Re: Economic suspension

April 5th, 2020, 12:20 am

1. (cont). Take Country A = Japan. They have virtually no natural resources. How does the Japanese Govt supply the oil the country needs? The banks are shut-down under your plan. Be specific.
 
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Paul
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Re: Economic suspension

April 5th, 2020, 12:38 am

(I excluded energy!)

I don't know how much oil/energy Japan needs. I am sure they and everyone else want plenty!

Random website: https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption There are some quite civilized countries that don't use all that much energy. The US is not one of them! (Take that how you will!)
 
jkiely
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Re: Economic suspension

April 5th, 2020, 2:13 pm

I think there would be a big issue delineating essential from non-essential. Food and energy are clearly essential, what about the data recovery/backup tool that a food delivery co relies on to keep its systems running. An ERP system that the energy co uses to co-ordinate its operations, or the legal co that advises the ERP company that their legal liability if they take on a new client that needs their service. 
It's difficult to find a company selling a product/service to businesses that would not be relied upon by an 'essential' industry.
 
Austriarian
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Re: Economic suspension

April 5th, 2020, 2:51 pm

The Governments/controlling entities would have to agree on essential/non-essential, and we'd all be dead by the time western countries agreed that Financial institutions aren't "essential", if at all. Those being in a fragile state wouldn't be able to cope. 

That and how does one monitor/prevent non-essentials from just ignoring and scampering on as normal? Unless there's a hefty( and I mean obese ) penalty when the world comes back online?

I like this thread. 
 
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Cuchulainn
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Re: Economic suspension

April 5th, 2020, 3:44 pm


(I'm not trolling, honest! Am doing what I often do, laying out an extreme position in a new direction. Optimal solution may lie somewhere between it and where we are. Goal is to find that optimum. It's usually closer to where we are than the extreme, but it throws up some ideas.)
I agree.
 
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Paul
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Re: Economic suspension

April 5th, 2020, 5:18 pm

The Governments/controlling entities would have to agree on essential/non-essential, and we'd all be dead by the time western countries agreed that Financial institutions aren't "essential", if at all. Those being in a fragile state wouldn't be able to cope. 
Normally I would totally agree! Look at the EU negotiating with Canada! But they seem comfortable telling people not to go into parks etc. 

Financial institutions that are fragile wouldn't survive under the current constraints. Many businesses won't survive. They might have a better chance under an induced economic coma.
Austriarian:

That and how does one monitor/prevent non-essentials from just ignoring and scampering on as normal? Unless there's a hefty( and I mean obese ) penalty when the world comes back online?
No different from the social pressure to keep out of parks and to wear masks. In my opinion much of the mask wearing is a signal to others to obey all the other rules in place. That's part of why I do it. And obvs also so I can stick my tongue out at people I don't like.
 
Austriarian
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Joined: January 21st, 2020, 10:41 pm

Re: Economic suspension

April 5th, 2020, 11:13 pm

Oh yeah definitely! Though will that gov authority extend to their pals at large companies? At this point it's like telling a 3 year old to stop reaching for the cookie jar. Whether an economic melatonin agrees with the bottom line is important. Another round of "too big to fail" anyone?  

The social pressure might be the biggest helper, though that probably breaks down at some level no? Does public opinion drive the media or vice versa? Probably some annoyingly complex combination.

The experiment would be a good pump fake to see the reactions of some "respectable" peoples/entities. 
 
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Randor
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Joined: October 8th, 2005, 8:33 am

Re: Economic suspension

May 15th, 2020, 3:49 pm

sorry writing a month late but anyway,

* we already see this economic suspension, in the REAL economy lockdowns, but i guess you are talking for some much more extended period
* in the financial economy, nothing has stopped.  
* there have been bailouts to both wall st and main st, sometimes as handouts, which is best for countries that can do this without any harm (which actually would be surprisingly many in fact! if u prefer, think of it as a negative tax) , often as loans (which will ofcourse make the economic recovery much slower).
* to me its fairly simple:  for people to go into lockdown, how can they survive?  they have rent and mortgages to pay, and food, energy costs.  the government should simply print the money for people to get this money.  and same for businesses.  this is something to discuss in a post on its own i suppose
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