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Originally Posted by DJ's left nut
Looking at the stimulus packages in Europe suggests what we're more likely to eventually start doing here.
They're guaranteeing billions in loans. If the government comes up with a package that offers something similar, that should calm the markets down quite a bit.
Give business owners the understanding that they'll have banks that are fully backed by the gov't and thus willing to stand behind them to get through this and they'll calm down a LOT.
This initial package that's cleared the House doesn't do that and that's why you've seen little in the way of market response. What we've seen now does nothing but encourage businesses to cut their employees loose. "Well if the gov't is pumping money into unemployment...guess you're on your own. Sorry - keep your contact information up to date..."
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Quote:
Originally Posted by DJ's left nut
Yeah, to my eyes that's just backwards. It's populist (to be generous) and does little to truly calm things.
That approach will GET people laid off. You want to prevent layoffs, back loans. And if companies get them but then don't need them, they'll pay 'em back. If they need 'em but the economy comes out as hot as many expect when this passes, they'll recover significant chunks of those losses as things improve and can pay them back over a reasonably short period of time.
But you have to give businesses the confidence that there will be banks willing to stand behind them. And to do that you have to signal the banks that the government will stand behind them.
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I have no clue on economic theories.
I see no way to talk about these issues without bringing politics into the discussion. So I’m going to punt on any bailout, stimulus etc. discussion.