Could Temporarily Freezing All Debt Help Economies Grow Faster? If So How?
Whether it’s in emerging economies, third world countries or just countries that are still growing and heavily developing, temporarily freezing debts for either personal or companies can help their economies grow faster by implying the following measures.
Choosing basic needs over debt repayment
-People need basic needs such as food, shelter and clothing to survive and keep the economy going.
-Freezing debt especially rental and mortgage that hold big chunks to allow people meet their basic needs creates a chance for development at personal, municipal and countrywide level.
-When such debts are temporarily frozen for maybe 2 or 3 months, people get adequate resources to feed their families, fund medical expenses as well as enhance their growth.
-Therefore, when basic needs are chosen over debt repayment, there can be a faster economic growth.
Evaluating universal basic income
-In case of job loss, furlough, or due to pandemics like Covid-19, people could have their debts temporarily frozen and a universal basic income set aside by the government to help the affected households.
-This is to give people a sense of security and stability in a way to make the ends meet which will then afford them an opportunity to reinvest in the community on a consistent basis and therefore keeping the economy strong.
Applying debt forgiveness
-Temporarily freezing debts by applying debt forgiveness to a couple of industries or public servants such as teachers, doctors paramedics, police officers can create a bracket system that will reward and encourage more of these professions.
-It increases encouragement and improves relationship between the employees and their corporations thereby increasing labor output essential for economic growth.
-Freezing debts like rental, mortgages or student loans by maybe 40 to 50 percent gives people the ability to invest in local businesses, reinvest in education or be able to afford permanent homes and even create jobs indirectly to others.
-Freezing these debts for a period of time can spread the economic impact more evenly throughout all the ranks of society like big banks, middle banks, landlords and low income earners.
-This will create equability and on the other side inject more money into the economy speeding up the economic growth.
-Despite the challenges that comes with it and the amount of time it can take, temporarily freezing all debts can still help economies grow faster.