US Economic Crisis by Dr. David Goldenberg: Strategies to Deal with the Economy (before late is too late.)
Here’s a mutually exclusive and exhaustive list of the broad families of strategies to deal with the current U.S. economic crisis. Which would you prefer? Tell your Congressmen.
I. Dabble and dither: This is our current strategy. Both political parties persist in offering variations of this inferior choice. Why inferior? Because the specific proposals either address only part of the problem or are economically unsound or ineffective. Each political party takes turns proposing treatment(s) which the other adamantly opposes. Relying primarily on an austerity program, a special case of fiscal policy, is one example. A dabbling and dithering strategy enables politicians to avoid doing anything they might later regret personally while allowing them to continue to hope that the problem eventually will evaporate without changing the status quo.
II. Devalue: Previously known as inflation or printing money wherein worthless dollars are used to pay off our debts. This special case of monetary policy simply would make things much worse. (Monetary policy is the exclusive province of the Federal Reserve Bank. But the Fed recently admitted that it has all but exhausted the power of monetary policy except for devaluation. Presumably the Fed hopes that some other policy set [fiscal, human, …] or combination will do the job. Finding that set is up to some other part(s) of the government. Viewed positively, this is an opportunity to earn lots of curses in Mandarin.)
III. Dump on other countries: Boost our economy by exporting more. Exports are such a tiny part of our economy that even tripling exports wouldn’t help much. Besides, the potential target countries are too weak economically to buy so vast a quantity of exports.
IV. Default: renege on the prior commitment to repay the debt and interest on it. Defaulting not only would cause a long and deep global recession but also would ruin the U.S. dollar’s reputation as having the world’s safest currency.
V. Destroy: World War II brought the world out of the Great Depression. But a replay is unaffordable today in both blood and treasure.
VI. Daring: Several generations of ignorant, desperate and apathetic voters allowed short-sighted, self-serving politicians to unintentionally create this mess. A consensus of experts’ recommendations is more likely to get us out of this mess than any proposals by the politicians who caused it or let it happen.
© 2011 David I. Goldenberg, Ph.D. Boynton Beach, FL USA