economic hibernation

This was originally described by Josh Frydenberg as the cryogenic freezing of the economy but was changed, as discussions went on, to economic hibernation. Perhaps cryogenic freezing sounded a bit scary and was harder to imagine in terms of the economy.  So hibernation it is, but, even so, it is hard to get a consistent picture of what people might mean by this.

 It would appear that the basic meaning is that all the current relationships between economic entities stay in place but the flow of money that is meant to be the result of these relationships does not happen.  The employee/employer relationship stays the same, the employees do not lose their jobs but they are not paid by the employer. The relationship is propped up by government subsidy. The landlord/tenant relationship stays the same, the tenants stay in their houses and apartments, but the landlord does not get rent. The government/citizen relationship stays the same but the government does not get taxes.  This means that the only expenses that people incur are those associated with food supply and health.  Those who do not have the resources to cover these costs would get government assistance.

 When the crisis is over everyone picks up where they left off. There are no back charges – the slate is wiped clean, but the economy stands a much better chance of bouncing back. The alternative to this is to allow the usual things to happen – employees get sacked, tenants get evicted, the government tries to extract taxes from people who have no money. In this scenario government welfare is the safety net but this can be slow, and the return to normal life will be complicated.