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Comment by dahdum | Hacker News Reader

Government should take a hit, in my opinion. It's inefficient for every individual and entity to prepare themselves against things like this, especially since government action (stay at home orders) is exacerbating it. The business "bailouts", at least the in US, are mostly just loans anyway. Taking a "too bad" stance and letting businesses cascade fail prolongs the pain and leaves the country worse off when the crisis is over.

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> Government should take a hit, in my opinion.

Government means "everyone who pays taxes".

I'm not sure that's fair. I think it's fine to spend taxes rescuing people (including the business owners if they're in personal trouble), but rescuing businesses feels like a very different story.

If you don't rescue businesses, you end up needing to rescue a lot more people. You can also give loans (not tax dollars) to rescue business. People require grants.

"loans" given to businesses often turn into grants when the principal is written off in a few years time after the public spotlight has passed.

Sometimes government even announces that they intend to do that at fancy private dinners with a wink and a nudge...

So we just don’t have restaurants (or people working there) for a year even after the stay at home orders end? I think people saying we shouldn’t bail out businesses haven’t fully thought these things through.

People are free to start up new restaurants.

Is this the right trade? When a restaurant goes out of business, we do lose a kind of stock of wealth. It's a tuned machine (suppliers, cooks, customers, an evolving menu maybe) and now we're starting over from scratch with an untuned machine. That's a real cost to everyone.

Yes, it's a cost. But so is bailing out the shareholders of businesses, who (by nature) are holding a supposedly risky asset.

Giving the business a grant is a cost, but how are loans? The US bank bailouts turned a small profit, and there's no reason that couldn't happen again this time.

Which is why I said a year after. Depression-level unemployment rates for a good year are not without secondary bad effects even with “haha money printer go brrrr.”

Businesses exist to serve people—both customers and as employers. In this case the businesses are also the ones being sued, and people only get affected because the business gets sued.

Funny how that's never the story when the economy is going up. Then they're suddenly amoral actors that should never have to care about the outside society or the people that they impact.

That's right, they shouldn't. Instead we need to structure the economy so that they automatically act in a way that benefits society as a whole.

And it's not corporations either - individuals are perfectly capable of being amoral, and we want to structure things so that they have no desire to.

I don't mind rescuing businesses. People need jobs.

I do get a bit annoyed at businesses who've gone out of their way to avoid as much tax as possible by using a variety of weird schemes, and who've gone out of their way to pay their workers as little as possible using a variety of weird schemes, suddenly deciding that The Government isn't so bad after all and asking for a handout.

We just passed the CARES Act in the US, which gives small businesses a loan about 2.5 X their average monthly payroll. It is fully forgiven if used for payroll, rent, or utilities in the first 8 weeks.

Except banks refuse to give you any loan.

That’s not true. The way it’s administered is an SBA loan, which have very specific guidelines banks must follow.

https://www.thestreet.com/investing/bank-of-america-changes-...

might be getting better now

The thing there is: I'm split on that.

I know plenty of small businesses and their owners. Bars, local cafes, all kinds of little startups, small construction companies, small companies in manufacturing. These businesses had no chance to prepare for a multi-month shutdown with zero income. For those guys, I'm perfectly fine to throw down my tax dollars without interest. This is a sufficient mess, just take it.

That's a situation we need our societies safety net in.

However, I'm concerned that larger corporations will throw more money than all of the small business I know make in a month at legal and siphon that money away. That'd be bullshit.

I hope governments can sort that shit out, at least in europe.

In that argument case, what about average citizens? Businesses seem to get bailouts when they fail because of unforeseen circumstances, but citizens are left to pay the bill. so in the end it is either fair, or someone takes a bigger hit.

Average citizens in need should (and are in many places) getting grants instead of loans. If the government lets businesses fail because they won't issue loans, more people lose their jobs and require grants. Much more cost effective to keep businesses alive.

That’s fine going forward but it’s not priced in yet so it’d be get another unfunded liability.

It’s like extending unemployment benefits to gig workers who never paid any unemployment tax.

If society is to underwrite the risk then society should collect when times are good.

If we taxed land, landlords would long get the rent for the building, which would be far, far less, as most of the rent in prominent locations is due to the location.

If we had land value tax the govt could have reduced LVT for the duration of the crisis, leaving businesses only paying for the far smaller amount of the building.

Reducing the LVT would have been effectively a grant, a real cost to the government that needed to covered by all taxpayers. Issuing them secured loans to carry them through this would not.

Agreed, but there is a real cost to be borne, I don't think we can evade that. However LVT would have provided a quick and relatively fair way to reduce ground rent by N% across the board. Ratcheting it back up if/when "business as usual" resumes would also be easy.

My main point is that as the "underwriter" the state should also be the beneficiary, as society creates the location value, not the landlord.

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