Extreme Health Crisis: treating the economic patient
To avoid damage to economy, when dealing with COVID-19, put the economy into stasis
Government has the learnt behaviour of throwing taxpayer money at affected entities in an economic downturn.
At the national level, it is not yet clear whether the federal government understands that it, as the party which is shutting down the economy, cannot expect stimulus measures to work.
What if there were a way to put the real economy into stasis while we deal with the pandemic? Press the pause button on the factors that cause irreparable damage in a recession/depression?
The current reality is that we are quickly moving to the position where orders will be made to completely isolate people (Italy, France), allowing only essential services to continue.
At this point, it is proposed that a declaration is made that all contractual/
After stasis, the freeze period is added to each contract, and obligations resume.
By doing this along the full value chain, taxpayer monies can be focussed on people being able to satisfy their basic needs (survival or living payments: think Maslow). Living expenses at this point have broadly been reduced to paying for food, health and energy services only.
When the 'start' button is pressed, all businesses and people remain in place for economic activity to resume with little disruption.
Remember this is a health crisis.
* the freezing of residential, commercial, equipment and retail leases, and other financial instruments, including personal, business and mortgage facilities, is required. As some of these contracts may originate beyond national borders, agreement by G7/G20, and a determination by the relevant international regulatory bodies would be desirable. Now that USA, UK, France, Germany, Italy and others are also acting to suppress economic activity in order to deal with this health crisis, such an outcome is more likely.
Happy to discuss
Rod de Beer
BCom LLB LLM MBA
Sydney Healthcare Pty Ltd
Rod de Beer