The president did well on Tuesday evening, but did not go far enough to close leakage of the stimulus. He did not suspend insolvencies and director duties relating to that.
Imagine companies with bank debt and falling revenues receiving the stimulus money. Banks, knowing of their borrowers’ deteriorating performance, are contractually entitled to call default, block bank accounts and use the monies to repay secured lenders (banks), leaving not a dime available to workers.
That will all be legal and would stand court scrutiny. The government may need to pass regulations to avert insolvencies, as the French and UK governments have done.
Yandisa Nongena, London
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