Maxwell Arias has a simple plan to have China pay for their role in the COVID-19 global pandemic.
Exactly who is Maxwell Arias? Many players have given their opinion on how to recover from this crisis. Maxwell Arias, a soon to be Wharton School of Business graduate chimes in, as well. However, all must be wary to heed the advice of New York governor Andrew Cuomo. To date, Andrew Cuomo’s state has been the hardest hit by this worldwide outbreak. He gives daily caution via a special report to all viewers to understand that the country is only at half time when it comes to the pandemic. There are so many questions yet to be answered when it comes to this novel coronavirus. That being said, it is refreshing to hear a new voice, in the person of Maxwell Arias, from this prestigious arm of the University of Pennsylvania.
Maxwell Arias is set to graduate in May of 2020. Unfortunately, due to the outbreak, his graduation ceremony will look very different. Undoubtedly, his point of view takes this reality into account. With a Bachelor of Science in Economics and a minor in Biology, Maxwell Arias has a unique vantage point for his perspective. How Economics and Biology meet is exactly where the world finds themselves currently. It will take years, if not decades to recover economically from our current and particular set of circumstances. Similarly, on the medical front, we are not where we need to be in terms of understanding COVID-19. As a result, a fresh young voice is a welcome authority. They are inheriting an unprecedented economic and biological situation.
Maxwell Arias Feels that China Should’ve Acted at least Three Weeks Earlier then Reports Indicate
Citing a Yale-sponsored study, Maxwell Arias asserts that 95% of the spread of the virus could have been mitigated with China’s earlier distribution of information. The current US debt to China is $1.1 trillion. Taking into account the immeasurable loss of life along with the unimaginably exorbitant financial fallout, Maxwell Arias posits that US debt to China should be adjusted to reflect the country’s negligence:
“The COVID 19 crisis has validated longstanding suspicions across the political aisle that the authoritarian Chinese government is the preeminent threat to the United States and global commerce. China’s policy of fabricating the economic and public health data shared with the world to project a facade of strength has birthed the greatest economic downturn in recorded history. The US, along with the global community, should demand reparations from China– both to deter future criminal dishonesty and to partially offset the massive expenditures undertaken to keep economies on life-support during lockdown. Reparations should come directly out China’s war chest of foreign debt. China is the largest holder of US treasuries with more than 1.1 trillion dollars worth. Some politicians such as Senator Marsha Blackburn of Alabama have suggested a write down of US liabilities to China to $0. She has asserted that: ‘We don’t need to be sending them one thin dime because of the trillions of dollars they have cost our economy’
Indeed it is true that the 1.1 trillion in outstanding debt is dwarfed by cost to the US government, which has already exceeded 2 trillion USD in stimulus spending, with an additional 3.5 trillion expected to be spent by the federal reserve to support the financial system according to Morgan Stanley. Unfortunately, for the time being, The US’ economy and financial system is too interconnected with China’s to take such drastic action. It could set a precedent for all governments across the world to default on their debts to China, plunging the world and the US into a deeper depression. China could also nationalize US assets in response. Instead, foreign debt held by China should be restructured to become 0 interest rate, non-collateralized loans with maximum optionality to defer payments and extend maturities.”
Maxwell Arias Postulates that the GDP Will be Exceeded by the Debt from COVID-19
According to Maxwell Arias, a situation like this has not occurred since World War II. Stimulus spending has exceeded $2 trillion already. Maxwell Arias uses Morgan Stanley’s estimates to assert that the federal reserve will spend a little less than 3 trillion to undergird the financial sector. He raises this argument to underscore the fact that China has a huge debt to pay to the US. The young wunderkind sites the 16,000,000 + unemployment claims of recent weeks as well as the small business administration loan program running into immense difficulty. 39 states are still experiencing lockdown status on some level. Huge structural mainstays like the postal service are suffering, as well. Instead of the US government hiking taxes or pulling levers, restructuring our debt to China will go far.