I am wondering, based on your example, in times of a pandemic such as the one we're going through right now or in times when the economy is severely disrupted, if not with the printing of money out of thin air, is there any way we could possibly maintain liquidity and keep the economy floating?
Yes. They could just let things go. The weakest company would sink good one would continue to work (and profit on reduced competition). Lockdown last 1-3 month (depending on country). If this is enough to destroy company maybe it wasn't strong enough? Maybe it was wrongly managed? Printing is simply taking money from you to those who leave on the edge of bankruptcy to give them extra year (in most cases). I wonder if people would be ok with that knowing that it is similar to taking 5% from your bank account and pure it into corporations.
You are speaking as if, in a pandemic, a company dies due to a healthy competition, or due to not being able to keep up with the latest technologies, or due to not being run well, and so on. It is certainly not the case. The case is that these companies are not allowed to operate. Hotels, casinos, resorts, airlines, shipping lines, restaurants, shopping centers, and even manufacturing companies are closed.
While there must be something wrong with how the monetary injections are being spent, a government for the people cannot just allow all these companies to freely sink just like that. That would mean incredibly high unemployment rate, loss of vital services, huge tax loss, and so on. All these would mean public chaos in due time.
However, all this is temporary. It is an emergency measure so to speak.
That's the problem though - it isn't temporary. Here's the Federal Reserve's balance sheet for the last 17 years (click for full size):
What I'm trying to say is that it is not everyday that the Fed is printing billions. I mean, the monetary mechanisms, although most probably abused, are there for dire times. I cannot imagine how the economy would fare out in a severe crisis without all this, say, in a Bitcoin-run economy.
For sure, the economic recovery from the previous crisis has been too slow. And, yes, the process of pulling out money from thin air into thin air is too slow as well that the next crisis was able to catch up and turned the entire process around. There is definitely a lot of improvement needed in that area considering that the next crisis is just around the corner.
Well, on a side note, talks of the US dollar losing value have been around for many decades. Notwithstanding the devalued dollar, however, I'm pretty sure you can still buy a burger with a couple of bucks.
