These "Ending Recession" ideas will guaranteed end any recession in record time and prevent recessions forever. In addition these ideas will guide any economy to its optimum potential while avoiding the conventional boom and bust cycles. In fact the "bust" cycles are totally eliminated.
Like any new ideas in any field of science these new ideas are in conflict with currently accepted theories and beliefs. And that is a good thing because new ideas must be in conflict with current beliefs. If they would not be in conflict they would not be NEW IDEAS. I created these new ideas building on theories and ideas of economists that came before me. The most interesting ideas on economics for me were those of Adam Smith and J.M Keynes. Keynes' ideas were very novel but by no means perfect.
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."
Of course Keynes had ignored, or was unaware of, the fact that, throughout recorded history, mankind had allways been ruled by a very small group of people that were sucking the life blood out of any economy by deliberately leading the populations under their influence by the nose and were ruthlessly enslaving them. Slavery is currently in its most sophisticated form where the enslaved (most of the population) are totally unaware of the fact that they are not free to benefit from the fruits of their labors because the vast majority of their productive contributions to the economy are cleverly stolen and creamed off from the economy by what I call "The Master Puppeteers" or "Cleptocrats". They rule all modern economies from behind the scenes and we do not know who these"Master Puppeteers" are.
My new 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 the following January 1, 1935 letter to his friend George Bernard Shaw:
"I believe that I have created new economic theory which will largely guarantee economic prosperity without any future recessions and with an ever increasing standard of living. Recessions created by natural disasters and pandemics cannot be prevented but will be turned toward prosperity in a minimum of time with application of these new economic insights. I can't expect you, or anyone to immediately believe this because it flies in the face of accepted economic theories/doctrines. My breakthrough ideas will be ridiculed by all who profit from current economic belief and hypotheses.
I have written this recipe for economic prosperity in the most simple terms so that it can be understood by the general public and economists alike. I will begin with explaining the solution that will end any recession in record time and prevent any future recessions. After reading this solution you will immediately be able to evaluate my very logical new economic theories. They need not be tested in practice because they are based in absolute logic. In fact also been inadvertently proven in practice by several economies that were run by spendthrift rulers who over-spent and consumed their economies into prosperity. Other less fortunate economies were saved into recession by their well meaning prudently frugal rulers. Sounds like total nonsense but is an absolutely sound and logical hypothesis.
Giving consumers money to spend
In short, this is the only solution to stop any recession in its tracks and return it to prosperity in record time by creating a dramatic increase in consumer spending by means of the government giving consumers the money to spend to increase consumption of products and services. Immediate reaction from "experts" to such a "too simple" idea will be "If things were really so simple, the governments in all countries would have done these things already a long time ago." "Where will all that money come from for these clearly socialistic ideas?". The money supply is controlled by the Federal Reserve system so the Federal Government can just borrow a few trillion extra to fund recession reversal. "But wait, that increases the Federal Debt even more and it will create inflation" will cry all those who are well versed in presently believed economic drivel.
So we simply close the Federal Reserve System (that is not FEDERAL at all and has no Reserves. and "We the People" will end this FED scam of creating money out of thin air and we will take that previlege of creating money back into the hands of Government (just as the Constitution wanted it to be in the first place). The Cleptocrats will fight the closing of the FED with all their might, which is sustantial because they control the media and they have the financial resources with which they "buy" whatever Government resources they need to preserve the Status Quo.
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 and ridiculed as being too simplistic and contrary to much of what many highly credentialed 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. Most of the public has been successfully and falsely educated to believe that any suggestions of invisible rulers running the economy from behind the scenes and corrupt public officials are just silly conspiracy theories. Start doing a little thinking people. Another proverb is in order here: "It is fortunate for those in power that people do not think." --Adolf Hitler
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 and sophistication go together
“Simplicity is the ultimate sophistication”. Leonardo da Vinci 1452-1519 (My ideas are extreme simplicity and thus might just be extreme sophistication).
"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 my ConsumptionSideEconomics).
No more tinkering
This is not the endless tinkering by governments with economic trial and error magical economic potions for prosperity. In fact it will eliminate tinkering altogether by turning the trial and error alchemy of economics into an accurate science that cannot be gamed by the sort of people that currently are gaming all economies and are fleecing the economies of most Countries with clever monetary manipulation.
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 to find economic counter measures to stop the recession and turning it into the direction of ever increasing prosperity for everyone. This is easily understood when you learn the measures that will stop any recession in record time 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:
How recessions start
Lets assume that statistical indicators have detected a small recession with a drop in consumption of products and services of only 5% to 10%. The government typically will do nothing at all, other than to prepare a nice statement for the press explaining that the economy has caught a small cold and that the government has everything under control because it has ordered a commission to look into the causes of the small downturn of the economy and another commission to determine which cold medicines should be given to help the economy to get over the cold in a short few months.
How recessions get bigger
When governments do nothing, recessions get bigger. With only a 5% drop in consumer spending many businesses must tighten their belts and reduce overhead expenses by laying off employees. That creates unemployment. These newly unemployed people have less money to spend and that creates an additional reduction in consumer spending which in turn will reduce the income for all businesses even more. This starts a spiraling down of the economy with consecutive cycles of less employment, lower consumption, and additional cycles of unemployment and less spending, until some businesses are forced to close their doors completely. That is a point when the spiraling down of less consumption and less employment accelerates to a large number of business closings and large unemployment and a deeper recession. By that time of course the government knows that it is in deep trouble but it is still clueless about how to revive the economy while trying some desperate measures that do not work and sqander a few billions on stupid stimulus experiments. They can only think of concentrating on "increasing employment" (Keynse's ideas) and that is an unfortunate but understandable mistake. The real brilliant solution is to increase consumer spending as is explained below.
Comparing recessions to brushfires
Doing nothing about a small economic downturn is like doing nothing about a small brushfire. As soon as a small brushfire has been reported to a Fire Department, speed is of the essense to keep the small brushfire from turning into a big blaze. The Fire Department does not order a commission to study the cause of the fire and does not wait a few months for the commission's study report. Fire Departments are totally prepared. They have equipment and methods at the ready to quickly respond to fires. They have also learned the quickest and most effective ways in which to put down a fire. They have fire commanders that are armed with all the knowledge needed to put a fire down as quickly as possible. As soon as a fire has been reported they immediately dispatch a few fire trucks that are under the command of a fire commander. When they arrive at the place of the fire each member of the fire crew knows exactly the task they are expected to do and the fire is put out as quickly as possible with mainly using water and some fire suppressing chemicals. Fire Departments also implement preventive measures with wich they reduce the incidence of future brush-fires.
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. He recommended a make work program to Roosevelt, the WPA program that created many jobs and got wages into the pockets of the over 25% unemployed. I have found a much quicker and more effective way, but it requires getting the general public into active gear to counteract the impressive power of the special interest Cleptocrats to maintain the Status-Quo. The General Public is generally against any change as long as their current economic conditions are still bearable except when they are offered an immediate tangible benefit such as "We, your nice friendly Government, will take from the Rich and give it to you guys".
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 will 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 effeorts to stimulate economies out of recession will prolong and perpetuate recessions. Immediate action is needed as in the brushrire example.
My LibertarianEconomics idea ends recessions in record time
This 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 or appreciate simple ideas because they themselves always create complicated ideas and 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 giving the money in carefully computer generated amounts that will prevent 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 because higher production of goods and services creates DEFLATION (the opposite of 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 give people te money
The perfect method to distribute the money is to create Federal Debit Cards for all people that have a Social Security Card including babies and small children (about 315 million debit cards) and fund these Federal Debit Cards with carefully 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. It is also forbidden to cash out the money and save it up. It can only be spent on consumer purchases of products and services. Of course there will be about 20% of the 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. But that would still mean that 80% of the debit card funding will go into the economy. That means great success.
But 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 the 315 million Federal Debit Cards that have the same serial number as the 315 million Social Security cards people hold. Everybody gets a Federal Debit card, even babies and small children. The parents or guardians 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 petition their parents to buy the things they want.
Funding the debit cards starting with $475 per month for 12 months running will end the current recession immediately (yes we are still in this big recession even though the Government lies that the recession is over). It will bring the economy back to its pre-2007 prosperity level and beyond (some funding 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 315 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 with which they can immediately start infrastructure projects and increase a bit of extra employment.
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 Libertarian 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 LibertarianEconomics ideas. 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 currently 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 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 in the first place. Of course this would require a citizen oversight committee 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 committee. 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 with the application of Libertarian Economics.
Recessions can be totally prevented
In fact, with this method of ending recessions, recessions can be totally prevented 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 satisfy more consumer spending. 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 itself. In fact they have a negative cost because they add to the wealth of the country in terms of better infrastructure.
Some signifficant side effects of LibertarianEconomics
When the Federal Reserve System is eliminated and the money is created by "We the People", the Government needs no longer borrow money, it can simply create it. When "We the People" create new money out of thin air, tat money is ours. So we need not borrow any and we need not pay any interest and we never have to pay it back. The National Debt can be paid off with newly created money which of course will create inflation, but it can be paid off gradually to limit inflation to a acceptable level.
Next read about LibertarianTaxReform that will eliminate all 30,000 taxing agencies in the United States to be replaced by a single 5% money transfer exicise tax that raises more revenue than these 30,000 current taxing agencies. That will be fun to see the "expert" economists ridicule that tax idea and try to tear it apart.
Questions and suggestions to: Alf (at) Fastexercise dot com