Irrespective of who rules United States its economy will need economic policies that is different from what Paul Krugman or his likes suggest. Fixing or manipulating interest rates hasn't worked. Government spending or stimulus hasn't worked. Manipulating taxes hasn't worked. To make Americans happy economy has to be run with new ideas that are implementable.
How do we run the US economy to deliver double digit growth and create ample employment opportunities for Americans? Some of the ideas are highlighted below:
1. Raise Government revenues without resorting to taxes and duties. This will eliminate Government borrowing. Shut the Federal Reserve Bank. The US government has the power to print currency and coins and that power will be limited by the amount of Gold in the possession of the Government.
2. Since Government doesn't have to borrow money there is no need to set interest rates by the Federal Reserve.
3. Regular Banks will function but they will be full reserve banking. Fractional Reserve Banking will be out.
4. Regular banks will pay interest to depositors based on their capacity to attract savers.
5. Regular banks will manage the assets created by them by extending loans. No securitization or off balance sheet trickery.
6. Regular banks accepting deposits will not invest money in the derivatives or futures market.
7.Pension savings of US citizens will be invested in a US government account. The US Government can use the money by paying interest. This act will ensure pensioners savings is not squandered by reckless banks or pension funds.
8. Manufacturing Companies will be funded by Preference Shares paying fixed dividend. The management of the companies will be freed from the pressures of stock market which is a key driver of outsourcing manufacturing, mergers etc which kill both economy and jobs. As fixed dividends outlay will be far lower than equity dividends companies will have more money to reinvest in the business. The value of the company will be its net worth.
9.As businesses can't be saved so jobs can't be saved. Reckless Banks or companies will not be saved with tax payers money. Mismanaged companies can be taken over by other companies.
10. As businesses or banks are free to open and close geuine capitalism will operate creating enough opportunities for people to get jobs and also raise wages. What Americans need is job mobility not job security.
11. Plenty of job opportunities or job mobility will ensure the best working conditions and also raise the wages. Trade Unions can be made redundant.
12. Global trade will be performed by paying in local currency. US exporters to India will get paid in Rupee. Indian exporters to US will get paid in dollars. Trade will balance. This act will get rid of foreign currency speculation.
I want students and professors of MIT, Stanford, Harvard to read this post.
I also request World Bank and IMF to read this post.
I want the Noble Prize Committee for economics to read this post.
Post Covid 19 economy cannot be revived with pre covid 19 economic policy prescriptions.
Beware of economists who advocate more government control and spending because market economy has failed. In reality, Capitalism has earned a bad name because of the Government act of saving banks who indulge in greed and questionable practices. If you keep aside Banks for a moment, in the real economy producing goods and services businesses open and close down on a regular business. The outstanding example of Genuine Capitalism is in the retail sector where businesses open and close on a regular basis.
The global economy will recover if Banks that are mismanaged are allowed to die or taken over by another bank
The United States is taken as an example to illustrate the point. What is written in this post is applicable to every economy be it Germany, France, United Kingdom, Denmark, Sweden, Canada, Japan, India, Vietnam etc.
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