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How to Fix the World Economy
OK It's boring, but read on
I do remember this statement from economics back in the day and didn't pay much attention to it until now. Fixing the economy is really quite simple. It just takes some action on three groups and that is what is holding the whole process up. Everybody is waiting for somebody else to do something.
It's not unlike the old high school dance where the guys are on one side and the girls are on the other. The party doesn't get started until one guy and one gal get up and start to dance. The music will keep on playing but no one is going to have any fun until the dancing starts.
So let's start the dance. I think G should lead. Government is spending money but in the wrong places. Instead of spending it on fighting conficts on the other side of the world, it needs to be focused on doing things domestically. The money needs to be directed at something that will generate a return at home like new businesses that have a product for the future such as alternative fuels, the Internet, affordable consumer products with basic features to name a few.
Then "I", the business community, will get off its hands and join the dance. They will be encouraged by the government's invite to play a different song and try some new steps or maybe just go back to ones that worked. Take the choice of music out of the hands of the bean counters. They only like safe music. Put the mavericks back in charge of the song selection and those would be the sales and marketing types, the free thinkers, the entrepreneurs.
Then C, all of us consumers, would be encouraged to join the dance. We would join in huge groups if the other two would just lead the way.
And here's a way for G to start the dance. Australian government has been kicking around the idea of giving everybody a sum of money that they will likely spend locally. I think this one has merit. Take the money from defense budget spending and trips by diplomats to some far away land and give everyone $1,000 to spend on something. Make it so that it can't be used on exisiting debt or mortgages or go into savings. It has to be used to start the dance.
Then business will have more orders but they have to get smart and offer products that are more in tune with todays market. Less extra stuff because we don't really need it and know that we really can't afford it either.
So more orders, leads to more jobs where more taxes are generated that helps the whole dance turn into a really fun party.
I guess I'm just too simple. It's so easy that even a child would enjoy the dance. So Mr. Government start the dance. I think Pres. Obama might be thinking about leading. I sure hope so.