Quote:
Originally Posted by GarryEllice
I'm assuming, maybe naively, that the government will provide support to small businesses to prevent massive casualties. It makes no sense to allow thousands of businesses to disappear due to a temporary, self-imposed reduction in activity. This is not an ordinary economic downtown; it's more like an induced coma. The normal rules don't apply. But maybe I'm overly optimistic...
|
Well that works for a short while, but you have to consider that all these places don't magically get to stop paying bills, neither do they usually have huge amounts of cash on hand to keep them alive for a prolonged shutdown. These businesses have a cash flow problem, a really big one. And it's not just small businesses, large ones will experience serious trouble too, which is why there's all this bailout talk, especially in the states.
So while I agree that it doesn't make sense that thousands of small businesses can just be allowed to disappear, the longer the shutdown, the more likely, and the reality is that we don't have enough cash to keep floating these businesses indefinitely, or very long at all really, before we start creating massive long term economic headaches.
We're going to reach a crossroads very soon, maybe we already have, where we have to be realistic about what the consequences are of keeping people home. This is undoubtedly the biggest shock to the economy in modern history.