I said: Why would gov't ownership of stock drive down yields any more than anyone else owning all that stock (which is already owned, just not by the gov't)?
He said: Same reason the huge amounts of cash floating around right now are keeping yields down. At least with debt instruments, having a bigger buy side means lower yields. Anything managed by the government would almost certainly have to be low risk, making debt a big piece of whatever portfolio they would assemble.
He (whoever he is) is right. You're thinking about a non-realistic scenario where everyone buys and then holds, never selling to pay for bills or because they want to, he's at least looking at it from the rational angle of, "what if the government bought (less than a controlling majority of) private equities for use in a UBI (which by the way is asinine, but that's another discussion), therefore
BACKDOOR GUARANTEEING ITS SAFETY THROUGH THE TAXING POWER LAID OUT IN THE CONSTITUTION what would happen to the yields?" The answer, as he lays out, is that the perceived risk of the equities purchased by the government would be lowered, and asset prices would be driven up and the yield congregates to the risk free rate (treasury rate)
Your opening question and the question he is answering have nothing in common. Your opening question scenario would never happen in any circumstance. Even if the stock exchange was closed tomorrow due to a heavy terrorist attack, people would still be trading securities, just not on the stock exchange. They could do it in person out on the street, for example, offering to sell their shares for XX or buy someone else's shares for XX. There would no longer be a universally visible quoted price, but I think for most people that might actually be a great thing - helping to mask the deficiencies of the human psyche that push a lot of people towards trading instead of investing