There are lots of solutions, lots of ways of doing things better and all sorts of things that can be done to help people weather the storm. The reason I didn't put any on the table is your 'Attila the Hun' remark.
I have found that any solution anyone has purposed other than borrowing, spending, printing more money and regulating the bejeezus out of everyone in the process gets dismissed out of hand with some similar such remark.
None-the-less here goes...
Stimulus- The government can not spend your money better than you can, instead of giving it to their "targets" they should instead give the money back to the people that earned it in the first place so they can reinvest it as they see fit.
Tax's- Drastically reduce corporate tax's and consider eliminating them all together. You want these guys to make money and hire people. They need to be more profitable for this to happen. If Canada eliminated corporate tax's we would see a tonne of jobs and money flow into the country from everywhere in the world. BTW all of the stimulus and deficit spending is going to lead to higher tax's down the road as surely as day follows night.
Interest rates- Raise them. People need to save more and stop borrowing for consumption purposes and they need a safe and secure way to do it. 2% at the Credit Union just doesn't cut it. You've got way to many people speculating in the stock and other markets because they have no safe place to invest. People are being forced to take risks with their money that they otherwise wouldn't. Folks who are afraid of heights make lousy sky divers and leave nasty stains on the sidewalk.
Overly cheap credit also means that it doesn't get rationed appropriately, which leads to bubbles like the housing one. You get a lot less hang overs when whiskey is $20 a bottle than when it sells for a buck.
Monetary policy- You don't like the idea of going back to some kind of gold standard. Fine, how's about running the fiat currency the way it was intended to run in the first place? The original idea was that the money supply was supposed to increase and decrease with our level of productivity. It has never been decreased during a recession, only increased at an accelerated rate to re-inflate burst bubbles.
And how's about we start reporting inflation honestly? The consumer price index and the producer price index are a joke, they continually readjust or at times completely eliminate items whose prices increased. And in the US they completely stopped reporting the M3 money supply in 1996. They haven't done so here yet, but when is the last time you heard on the news anything about the money supply period?
Regulations- How's about a moratorium on new regulations? One of the fundamental rules of economics, that the welfare state tries to obscure, is that there is no consumption without there first being production. You don't work, you don't eat. Regulations hamper productivity and reduce profitability, both of which we need more of now not less. The two biggest things hampering our productivity in this country are tax's and regulations. The ridiculous labour and minimum wage laws don't help either. There are all sorts of places in the world that have huge advantages over us in these areas we shouldn't be surprised when we see companies moving there.
The economy cycles- Stop pretending that it doesn't! Or thinking that you can stop it from happening. Booms and busts are going to happen and there is nothing anyone can do to change that. With the right policies you can make the busts less painful but they are still going to be bad and they are still going to happen. Every year we know we're going to get some blizzards and we prepare accordingly, people need to do the same thing with their personal financial and economic circumstances as do governments.
If you've just lost your job or had to take a 25% cut in your pay you don't go out and get another mortgage to add a new wing to your house or increase your donations to your favourite charities. If you're an alcoholic you don't sober up with another bottle of gin, and heroin addicts don't get better by taking another hit. All of which our government is doing right now. But supposedly it's okay because everyone else we hang out with is a junkie too.
If we ease off the stuff now, yah its going to be bad, but if we don't it's going to get worse. We're eventually going to hit bottom and have to go cold turkey. I'd rather move away from the herd and sober up now than wait for that to happen. But you know I'm one of those nasty 'Attila the Hun' types.
I have found that any solution anyone has purposed other than borrowing, spending, printing more money and regulating the bejeezus out of everyone in the process gets dismissed out of hand with some similar such remark.
None-the-less here goes...
Stimulus- The government can not spend your money better than you can, instead of giving it to their "targets" they should instead give the money back to the people that earned it in the first place so they can reinvest it as they see fit.
Tax's- Drastically reduce corporate tax's and consider eliminating them all together. You want these guys to make money and hire people. They need to be more profitable for this to happen. If Canada eliminated corporate tax's we would see a tonne of jobs and money flow into the country from everywhere in the world. BTW all of the stimulus and deficit spending is going to lead to higher tax's down the road as surely as day follows night.
Interest rates- Raise them. People need to save more and stop borrowing for consumption purposes and they need a safe and secure way to do it. 2% at the Credit Union just doesn't cut it. You've got way to many people speculating in the stock and other markets because they have no safe place to invest. People are being forced to take risks with their money that they otherwise wouldn't. Folks who are afraid of heights make lousy sky divers and leave nasty stains on the sidewalk.
Overly cheap credit also means that it doesn't get rationed appropriately, which leads to bubbles like the housing one. You get a lot less hang overs when whiskey is $20 a bottle than when it sells for a buck.
Monetary policy- You don't like the idea of going back to some kind of gold standard. Fine, how's about running the fiat currency the way it was intended to run in the first place? The original idea was that the money supply was supposed to increase and decrease with our level of productivity. It has never been decreased during a recession, only increased at an accelerated rate to re-inflate burst bubbles.
And how's about we start reporting inflation honestly? The consumer price index and the producer price index are a joke, they continually readjust or at times completely eliminate items whose prices increased. And in the US they completely stopped reporting the M3 money supply in 1996. They haven't done so here yet, but when is the last time you heard on the news anything about the money supply period?
Regulations- How's about a moratorium on new regulations? One of the fundamental rules of economics, that the welfare state tries to obscure, is that there is no consumption without there first being production. You don't work, you don't eat. Regulations hamper productivity and reduce profitability, both of which we need more of now not less. The two biggest things hampering our productivity in this country are tax's and regulations. The ridiculous labour and minimum wage laws don't help either. There are all sorts of places in the world that have huge advantages over us in these areas we shouldn't be surprised when we see companies moving there.
The economy cycles- Stop pretending that it doesn't! Or thinking that you can stop it from happening. Booms and busts are going to happen and there is nothing anyone can do to change that. With the right policies you can make the busts less painful but they are still going to be bad and they are still going to happen. Every year we know we're going to get some blizzards and we prepare accordingly, people need to do the same thing with their personal financial and economic circumstances as do governments.
If you've just lost your job or had to take a 25% cut in your pay you don't go out and get another mortgage to add a new wing to your house or increase your donations to your favourite charities. If you're an alcoholic you don't sober up with another bottle of gin, and heroin addicts don't get better by taking another hit. All of which our government is doing right now. But supposedly it's okay because everyone else we hang out with is a junkie too.
If we ease off the stuff now, yah its going to be bad, but if we don't it's going to get worse. We're eventually going to hit bottom and have to go cold turkey. I'd rather move away from the herd and sober up now than wait for that to happen. But you know I'm one of those nasty 'Attila the Hun' types.
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