A revision to the U.S. Constitution requires a two-thirds vote of each house of the Congress, the signature of the President, and the approval of three-quarters of the states. It is something that is virtually impossible to achieve. And yet if we had a functioning government, it is something that would probably be attempted immediately. Right now there are millions of contracts outstanding that require people, businesses, and property owners that suddenly have no revenues to pay someone else money. Leases and mortgages, for example. Money those who owe do not have, thanks to coronavirus-related shutdowns.
As it stands the result will be a wave of bankruptcies and foreclosures that leave everyone — those who owe, those who are owed, and third parties — worse off. Or renegotiations, in bankruptcy or out, that take time, lawyers and money to complete, and may not succeed. Or mass bailouts that benefit existing interests — and benefit them more the better off they already are — at the expense of less well off later-born generations and the future of the United States.
I propose a fourth option. Allowing the government to, in effect, suspend contracts en masse for people and organizations that have lost their income due to government-mandated shutdowns during a pandemic. The contracts would remain in place, but would be frozen. No money would be owed during the shutdown or for a month thereafter, and the contracts would be extended for that length of time. It would be as if the time of the shutdown and the month after had not occurred. Financial asset holders would, in effect, be forced to provide zero interest loans during the shutdown. Frankly, right now that’s a pretty good rate of return compared with the alternatives. The problem with this proposal is that it is unconstitutional.