“Time Suspended” — EXECUTIVE SUMMARY

Premise

 The economic crisis is nearing a tall cliff as entire business sectors (e.g. restaurants) are running on fumes and rapidly approaching bankruptcy. The same is true of millions of households who face looming evictions;

◊ From there, the crisis can spread to the financial and real estate sectors, converting temporary loss of rents and interest revenues into long-term capital losses;

◊ While the US economy has shown strong resilience and has bounced back from the lows of last Spring, the recovery is destined to be K-shaped unless strong action is taken now. In the process, the life and livelihood of millions will be dramatically damaged;

 It is critical to stem the rapidly accelerating avalanche of closures and bankruptcies as keeping alive existing businesses will lead to a much faster recovery and much less pain than permitting businesses to fail and wait for the formation of new businesses and the rebuilding of economic chains;

◊ Traditional relief and stimulus packages that cost the government trillions, are inefficient and unsustainable. Instead, the burden of the crisis must be spread out on the largest possible base to reduce pressure on the weak links and allow them to survive. Also, ‘stimulus’ and ‘relief’ must get to where they have the most impact.

The “Time Suspended” Proposal is a legislative proposal that, by itself, requires no cash outlay by the Government:

◊ Set ALL interest rates on ALL financial assets, ALL unproductive business real assets, and ALL personal mortgages to 0% on all preexisting contracts while the crisis lasts;

◊ Concomitantly, defer all installments and extend all contracts by the same amount of time, as appropriate;

◊ The deferments and suspensions to be modulated over time in proportion to business or household income contraction;set ALL preexisting interest rates on ALL financial assets to 0%;

◊ It is critical that the paradigm be applied THROUGHOUT the entire economic chain — else, the burden of the crisis is simply shifted to another group of economic agents (e.g. landlords) instead of being spread over the base of the entire economy;

with Prof. Raphael Douady
research Professor at University of Paris I: Pantheon-Sorbonne; mathematician, statistician, extreme risk specialist https://en.wikipedia.org/wiki/Raphael_Douady

A more detailed explanation of “Time Suspended”, why it works, how it works, and its effects on the various kinds of economic agents and the government can be found in the academic paper on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3635812

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