Stringent Economic Strategies:
The present economic strategies, forcefully encouraged by the IMF, are liable to cause long term stagnation. The strategies I suggest are the result of the influence of lumbering economic dogma disdainful of government directed economies. Willfully pursued by the British government, and imposed on the economies of Greece, Ireland, and Portugal these measures rather than the effects of the Bank crisis will ensure Europe’s economic demise. What we have is the last trumpet call of Puritanism. Greedy, overspending, fat populations (not irresponsible bankers and incompetent governments) brought to heel, and made to face their shiftless ways. How they must now be made to suffer. The use of words such as ‘endure’ and ‘punishment’, seen in many dailies reporting on the issues, suggests the pronouncement of moralists.
Such policies misunderstand the nature of public spending, focused perhaps on a largely American belief in the importance of entrepreneurial wealth-creation.
Public Spending and Wealth:
Money spent by a government on a public service is not, as appears to be believed by many economists at the government’s beck and call, economic waste but a method of creating the means of wealth. It’s what separates wealthy countries from poor countries. Britain was the originator of continuance government wealth creation. Successive early governments initiated the building of Liverpool and London docks, causing wealth from the Americas and Far East to be directed towards Britain, thereby fashioning national wealth based upon trade. Government encouraged the building of railways, ensuring Britain continued to economically compete beyond its size for a further hundred years.
Importance of Locally Directed Economic Initiatives:
The maintenance of the urban environment by council officers creates the enabling environment that allows for prosperity, transversible roads, able communications, the free and rapid movement of cash and paper money, credit and electronic money (the use of cards which carry the same contracted promise as cash). Council officers spend, often locally, pay taxes, acquire property. They are bound to strengthen, not weaken, the local economy. In China, local initiatives are fuelling economic growth. Active, participatory local government directed economic growth is essential for healthy national economic growth.
In poor countries, little attempt is made at upkeep. Road repairs or road building is not considered essential as often money-making is located within individuals. In Nigeria for example, a big man generates wealth, often pocketing much of it himself. The money is not spread around, vitalizing both local and national economies. A road built or repaired constitutes wealth-creation through the facilitation of community development and easy travel and communication. A good, well built road connects one group with another, causing them to work together, trade and develop trade. The direct use of money, to encourage building, buying a number of commodities and employing labour, aids the control of money flow but also allows money to be active.
Economists dogmatically assume that money used in such a fashion is passive, and therefore unhelpful to wealth production. If the money flow is active, it produces wealth creation. Buying and selling is one means of circulating money (and of course goods) but not the only means of creating wealth. Currency which circulates through government run agencies stimulates beyond procurement, supply, and private savings and spending. It involves controlled wealth stimulation.
Greece:
The present economic state of Greece, where immense numbers worked for the government creating an artificial economic environment, is used as a means of justifying economic policy. Greece is an exceptional case. The problem there appears to lie with the Greek government’s unwillingness or ineptitude in the collection of taxes from influential sections of Greek society, especially the middle class. Clearly, a system based upon government jobs requires the efficient collection of taxes.
Effective public expenditure:
Money spent on benefits means that money continues to circulate, which governments can control. People on benefits, sickness or unemployed, act as a brake on inflation. The problem of benefits lies in an excessive number of people on benefits creating local downturns. A depressed local population has a knock on affect. Companies, even national companies, struggling in such an environment suffer. Cuts are made, projects shelved, the business suffering elsewhere to keep alive an unproductive shop, pub, or garage in a failing local economy.
