[The Young Wizard]

This occurred to me this morning. Against having to reimpose renewed lock-down measures, people reasonably reply that there is a need to try to avoid further economic damage. With regards to jobs which aren't essential, my initial response is just that the governments of the world (those faced by this problem, anyway) need to realise they may need to grasp the nettle even more drastically than they have, and be prepared to pay even more wages etc. The reasonable response to this is that governments can't afford it. Obviously this can be debated. But even if so, what doesn't seem to be being asked is, if the governments can't afford it, who are those who would be the creditors who are unwilling to extend credit in these exceptional circumstances? Obviously it will be wide variety of people - just about everyone (in rich countries) who has a pension, for a start, as so many stocks are in pensions - but also a majority stake will surely ultimately be the very rich (via their holdings in the companies which would offer the credit etc.). If this is correct, whoever these creditors are, if they were to refuse would basically be placing huge people in danger, knowingly, from the virus, simply in order to maintain their wealth. Not even maintain their wealth - as ultimately it will come back, we presume, as the economy recovers in some kind of fashion - but maintain their wealth over the short term. Of course, we don't really readily recognise they and us (and ourselves - in the case where we are the very shareholders) are in this situation. Basically, if these people can't afford to cut the governments a large amount of slack at this point, they never will - which is what I expected anyway.

I realise there is much to be debated economically here on the fine details, but then I'm not an economist, so I don't want to try to resuppose too much.

[Steve_American]

The economists of the Modern Monetary Theory (MMT) school point out that the central bank can buy the bonds, either directly or after some entity has bought them 1st. It is obvious that that entity will have made some instant profit. It is obvious also that that entity will have the principal back and can, the next day or hour, buy another bond, etc.
. . . The US Fed. Res. and the Bank of Japan have been doing this for years.
. . . The ECB can also do this, but this is violating EU rules. But, it has been doing it anyway for years too.

MMT-ers also say that many nations can just change the limiting law and spend into the economy without borrowing.

MMT-ers say that in this pandemic, this will not lead to on going inflation. OTOH, most economists would agree that, any economy that has been damaged this much by the pandemic and the lockdowns so far used, would likely have some price adjustments later. Some economists claim that a shot spurt of price increases later is not really "inflation", because it isn't 'ongoing'.
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