These "Ending Recession" ideas will guaranteed end any recession in record time and prevent recessions at least during the remainder of this century and likely much beyond. In addition these ideas will guide any economy to ever higher standards of living while avoiding the conventional boom and bust cycles. In fact the "bust" cycles are totally prevented.
Like any new ideas in any field of science these new ideas are in conflict with current economic theories and beliefs. New ideas must be in conflict with old ideas and current beliefs. That is what makes them NEW IDEAS. I created these new ideas based on the breakthrough ideas of J.M.Keynes. I gave the ideas the name Keynes Perfected because his ideas were a great leap forward for economics but they were by no means perfect and my ideas are an improvement on Keyns' but hopefully will be perfected some more sometime in the future as well.
John Maynard Keynes was the most important economist of the 20th century who with his magnum opus The General Theory of employment, Interest and Money has largely created the terminology and theories of modern macroeconomics. Keynes knew that he would upend the conventional economic wisdom of his day. In fact he stated as much in a letter to his friend George Bernard Shaw dated January 1, 1935, more than one year before the February 1936 publication date of his "General Theory":
"I believe myself to be writing a book on economic theory which will largely revolutionize the way the world thinks about its economic problems. I can't expect you, or anyone else, to believe this at the present stage. But for myself I don't merely hope what I say,--in my own mind--, I'm quite sure."
These new "Keynes Perfected" theories
I am so certain of my own new economic theories, that I am emboldened to write a similarly strong statement as Keynes did in his January 1, 1935 letter to George Bernard Shaw:
"I, Alf Temme, believe myself to have created new economic theory which will largely guarantee economic prosperity without any future recessions. I can't expect you, or anyone else, to believe this. I have written this recipe for economic prosperity in the most simple terms so that it can be understood by the general public."
Giving consumers money to spend
In short, this is an economic solution to stop any recession in its tracks and return it to prosperity in record time by forcing a dramitic increase in consumer spending by means of the government giving consumers the money to spend to increase consumption of products and services.
I have no big illusions that my new ideas will be immediately adopted by Congress or the Administration. On the contrary I expect very strong opposition from all the special interests that control and direct The White House, Congress, and the Federal Reserve. These new economic ideas will be attacked as being too simplistic and contrary to much of what many highly respected economists currently know and believe. Some quotes from people in the know are in order here:
"The real rulers in Washington are invisible, and exercise power from behind the scenes." -- Supreme Court Justice Felix Frankfurter, 1952 (this is currently referred to as "The Illuminati conspiracy".)
A warning from Niccolo Machiavelli (1469 to 1527):
"There is nothing more difficult to plan, more doubtful of success, or dangerous to manage than the creation of a new system… for the initiator is the enemy of all who profit by the preservation of the old system." (the old system is the way in which the economy is currently run by the real rulers in Washington that exercise power from behind the scenes.)
“Simplicity is the ultimate sophistication”. Leonardo da Vinci 1452-1519 (this is the extreme simplicity of "Keynes Perfected")
"In questions of science the authority of a thousand is not worth the humble reasoning of a single individual."—Galileo Galilei, 1564-1642 (the authority of a thousand credentialed economists and politicians that will sit in judgement of "Keynes Perfected")
I have studied Keynes' insights in economics and have created economic theories that will guide economies to everlasting and ever improving prosperity for the rest of the Twenty First Century. It is also the absolute perfect solution to end recessions in record time. In addition, my new ideas will with certainly prevent any future recession.
No more tinkering
This is not the endless tinkering by governments with economic factors to create a magical economic potion for prosperity. In fact it will eliminate tinkering alltogether by turning the trial and error alchemy of economics into an accurate science that cannot be gamed as much by the sort of people that currently are gaming all economies for their own advantage and are fleecing the populations of most Countries with financial manipulations.
All recessions start with a large decrease in consumption
After thoroughly researching the economic ideas from the past and drawing step by step logical conclusions, I have determined that all economic recessions start with a decrease in consumption of products and services. The causes that lead to the decrease in consumption of products and services are many and surprisingly the causes are of no importance in determining the economic counter measures to turn the recession into the direction of ever increasing prosperity for all. This is easily understood when you learn the measures that will stop any recession in its tracks and turn it toward everlasting prosperity for all.
So lets look at how a recession starts and how it progresses and how to stop and reverse a recession back to prosperity in record time:
Assume a drop in consumption of 20%
Lets assume that lack of knowledge of how to stop a recession and lack of action has allowed consumption of goods and services to drop by 20%. This would mean that the average retail business and service business will have 20% less gross income per month. Many businesses cannot survive a 20% drop in gross income because they cannot meet their overhead expenses and must close their doors. That results in unemployment for all the people that were employed by these businesses. Other businesses will have to reduce their overhead expenses and will lay off many employees as well which additionally increases unemployment. Unemployed people have less money to spend than when they were employed and that leads to additional lower consumption of products and services which in turn leads to more businesses having to close their doors and more businesses reducing their overhead by laying off people. This starts a spiraling down of the economy with continuing cycles of more unemployment, lower consumption, more businesses closing and laying off people etc. etc. It is a downward spiral of alternating rounds of less employment and lower consumption of products and services.
Looking for causes of recessions
When an economy has gone into recession, governments and their expert economists start looking for all the causes that may have contributed to the decline of the economy and they try to determine which were the major causes and from knowing the causes they hope to find counter measures to help the economy to recover. The causes are many smaller and bigger causes that each contribute to the drop in consumer spending that in turn is the major factor in driving an economy into deeper recession.
The current Great Recession
So with the Great Recession that supposedly started in 2007 (I have determined that it started in October 2006) the causes that were identified were the subprime mortgage crisis, international trade imbalances, tax lending standards, household debt, real estate bubbles, U.S. government housing policies and limited regulation of non-deposit financial institutions and many more. Once the recession began, various responses were attempted with different degrees of very limited success. These included fiscal policies of governments, monetary policies of central banks, measures to help indebted consumers refinance their mortgages and so on. None of them worked and that is why we still have not recovered from this Great Recession.
Finding causes of a recession will not lead to solutions
The beauty of "Keynes Perfected" is that it is so much simpler than the complicated economic ideas for counter acting the causes of a recessions. The solutions are even better than those of Keynes. Researching all the possible causes that send an economy into recession is a total waste of time and useless for finding the solution for stopping a recession and turning it around into recovery and renewed prosperity.
The simple solution to stop a recession and turn it around
The simple solution is to reverse the downward spiraling economy into an upward spiraling economy by just one simple economic measure of forcing an increase in consumption of products and services by all the consumers in the country, including the increase of consumption by all governments at all levels of jurisdiction. How to increase consumption? Easier said than done. But wait, it can be done in record time with the right idea, but how? Keynes wanted to increase consumption by getting money into the hands of people so that they could buy things and increase consumption that way. I have found a much quicker and simpler way, but it requires some more brain cells at all levels of jurisdiction to understand these new ideas in economics.
What is the main driving force of an economy
First we must understand that an economy is like a tripod that stands on 3 economic legs: 1.Production 2.Distribution and 3.Consumption
From further research I was able to conclude that Production and Distribution are not the primary driving forces of an economy. Consumption or lack thereof at the consumer level as well as at the government level is the main factor that drives an economy either up or down.
Every resession starts with a drop in consumer spending
As stated before, every recession starts with a reduction in consumer spending and/or government spending. These reductions in spending can happen slowly over a few decades resulting in a hardly perceptible creeping recession, or they can happen fast and be noticeable in just weeks or months. Local recessions can happen overnight if they are brought on by a natural disaster such as a hurricane, flood, tornado, fire or earthquake or a manmade disaster such as an oilspill or improperly built infrastructure that fails. Pandemics can also start a recession and they are the most difficult recessions to turn around if they have killed a large percentage of people in key positions of production, distribution and decision making.
Keynes had identified several economic factors
Keynes had identified a number of economic factors that drive the economy and he suggested several different measures that could stimulate an economy out of recession and toward renewed prosperity. Some of those factors were aggregate demand, employment, interest, money supply and inflation. He created all manner of theories with which any or all of these economic factors could be stimulated and manipulated toward a more prosperous economy. Keynes did not discover that there is only one single factor that can bring an economy out of recession very quickly and that the same factor can be used to guide the economy toward ever lasting and ever increasing prosperity.
Keynes' main solution was to increase employment
Keynes' main focus was on employment and that governments must stimulate employment to combat unemployment and poverty. Employment gets money into the hands of people to increase consumer spending to get an economy out of recession. An increase of consumer spending in turn will stimulate production and boost employment some more. It will also raise tax revenues so that governments can start spending more money, which in turn will also increase employment.
Nice idea but not the best solution
Increasing employment is an effective way to get money into the hands of consumers. Even creating make-work jobs is an option to get money into the hands of consumers to create additional consumer spending. But the creation of jobs can delay the recovery unnecessarily because the creation of millions of jobs can take some time and it takes good judgement which is largely missing in anything governments do. Politics get in the way and cause endless debates and delays and result in compromises that are usually half baked ineffective actions that are doomed to fail. Anything that governments do is subject to corruption and delay. Delays in stimulating economies out of recession will perpetuate recessions.
My "Keynes Perfected" idea ends recessions in record time
The "Keynes Perfected" idea to end any recession fast and prevent any future recession reduces government decision making to a minimum. Speed is of the essence when combating recessions. Any delays will cause the recession downward spiral to continue spiraling deeper into recession.
Simplicity is the ultimate sophistication
The problem with my revolutionary new economic insights is that the solution is extremely simple and people do not trust simple solutions because they sound too simple and too good to be true. But note that Leonardo da Vincy said “Simplicity is the ultimate sophistication”.
The perfect solution to reverse the downward recession spiral
The solution is to increase consumption of products and services by consumers. That seems difficult to accomplish in a recession. The President cannot go on television and say "My fellow Americans, open your wallets and start spending. It is good for the economy and it is the patriotic thing to do." In a recession people have empty wallets and have no money to spend. And the people who have money do not want to spend it and want to keep it as a nest egg for fear that things might get even worse in the future. So how can you get people to increase consumption? You simply give people the money to spend in the optimum amounts with which you want them to increase consumption while preventing hyper inflation. High inflation is acceptable as long as the larger consumption lifts the economy out of recession by creating higher production and higher distribution at the same time. The higher production will balance off some of the inflation. Creating more products and services creates deflation that will balance off some or all of the inflation created by an increase in consumption.
The perfect method to end recessions
The perfect method to ending recessions is to create Federal Debit Cards for each person that has a Social Security Card (including babies and small children) and fund these Federal Debit Cards with calculated amounts of money every month to get money into the hands of consumers so that they can start spending money on consumer products and services. In fact the money comes with the specific mandate that the money on the debit cards must be spent within 30 days after each monthly funding of the debit cards. Whatever money has not been spent at the end of the 30 days will revert back to the Treasury. In fact it is forbidden to cash out the money. It can only be spent on consumer purchases of products and services. Of course there will be a percentage of people that will game the system and will cash out the money by not using their own money and using the debit cards for their normal everyday purchases that they normally would have used their own money for. Maybe that would be 20% of the people that game the system. But that would still mean that 80% of the debit card funding will go into the economy. Great success.
Where does the money come from?
To get the USA out of its current recession and on the road to ever lasting prosperity, it requires creating 314 million Federal Debit Cards that have the same serial number as the 314 Social Security cards people own. Everybody gets a Federal Debit card, even babies and small children. The parents get the cards until the children are 12 years old when they will get to use their own cards for buying whatever they wish without having to petitioning their parents to buy the things they want.
Funding the debit cards starting with $475 per month for 12 months running will end the recession immediately and bring the economy back to its pre-2007 prosperity level and beyond (some adjustments may be made from month to month depending on inflation data) . The cost of this 12 month funding at an average of $475 per month will cost $1.32 trillion dollars. It will put $110 billion into the economy every month for 12 months running. The creation and distribution of the 314 million debit cards will take a few weeks. Meanwhile a smaller economy stimulus measure can be kicked off before the consumer debit card spending kicks in. Block grants to local governments can be made right away.
Block grants to local governments
Funding to governments at all lower levels of jurisdiction for local infrastructure spending can be done immediately to create extra local employment to kick start local creation of jobs right away ahead of the consumer debit card funding. I propose block grants to all local jurisdictions at county and municipal levels of government totaling $50 billion per month for 6 months that can fund all infrastructure projects that are ready to go right now (bridges, sewer, water, roads etc.). That will immediately start $50 billion per month flowing into the local economies and create jobs and income for businesses.
An ever lasting legacy for any President that has the guts
Any person in the White House that has the guts to champion this "Keynes Perfected" economics will go down in history as the most brilliant President the USA has ever had because of the prosperity it will create for all including the masses at the lower rungs of the economic ladder. And that prosperity will grow for many decades and forever after. Also it will encourage many other countries to follow suit in adopting the "Keynes Perfected". We will immediately know who all the politicians are that have no clue about economics. They will identify themselves immediately by observing that we do not have the money for such grand schemes and where the money should come from and that taxes would have to be raised to pay for such high expenses of funding the Federal Debit cards and that this is not politically possible with their constituency. Feel sorry for the politicians that expose their ignorance immediately with such dumb pronouncements. The money of course is immediately available by creating it out of thin air as is done by the Federal Reserve and the Fractional Reserve Banking scam every day. Except in this instance I am proposing to bypass the corrupt Federal Reserve (that has nothing Federal about it and has no Reserves) and return the priviledge of creating money out of thin air that they were granted to the Federal Reserve by a bunch of corrupt members of Congress on December 23, 1913 that were royally bribed by the banksters. It was a beautiful day for the scoundrels that run the whole economy from behind the scenes. I propose that we direct Congress to repeal the Federal Reserve Act of December 23, 1913 and return the creation of money to "We the People" as was intended by the Constitution. Of course this would require a citizen oversight commity randomly selected from a pool of qualified individuals that is in a cloudbased database and is randomly polled whenever decisions for increasing the money supply are called for and need approval from the oversight commity. This will minimize the possibility of the system to be gamed by the special interests that direct the economy from behind the scenes.
The sooner the better
The sooner the debit cards are funded after a recession has started, the less funding is needed to reverse the recession immediately in a very short few weeks or months. The longer the government sticks its head in the sand and plays trial and error games, the more costly and the longer it takes to pull the economy out of recession because more economic infra-structure is destroyed the longer a recession is allowed to ravage the economy. More restaurants are closed and all their kitchen equipment is auctioned off at 20% of replacement value. More factories will close and all their machinery is auctioned off at 20% of replacement value. To rebuild the economy from total destruction by massive business closings takes a lot more time and money than rebuilding an economy that has been in recession for only 2 months before it gets restored by "Keynes Perfected" economic measures.
Recessions can be totally prevented
In fact, with this method of ending recessions, recessions can be totally avoided in the future by implementing the funding of the debit cards as soon as the economy starts developing just the smallest noticeable downturn in consumer spending. Economies can be optimized into ever higher prosperity on a permanent basis if the debit cards are funded whenever the productive capacity of a country can meet more consumer demand. Government spending on infrastructure projects can also be increased at any time if the productive capacity is available. These projects will cost the country absolutely nothing if all the materials and labor come from the United States. In fact they have a negative cost because they add to the wealth of the country in terms of better infrastructure.
Questions and suggestions to: Alf (at) Fastexercise dot com