Economic Expert Advises Ruto To Carefully Print More Money To Employ All Unemployed, Plug Cash Deficit – Tuko.co.ke

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President William Ruto, Kenya is in a recession. The solution required can no longer be sourced from the current model of economics and though you have done well in conceptualising the Bottom Up approach, it does need more supercharging.
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The USA back in 1939 was in a similar state. Only one out of 4 people had a job, almost everyone was perpetually hungry and indeed nationally the emotional condition was depressing, but within 5 to 10 years America was a tier one nation again.
Millions of jobs were created, factories were running almost nonstop, and so generous was the supply of goods and services. How did they achieve this feat?
President Roosevelt, too, had just won his first election. He hired the services of an Economist known as Milward Keynes. Keynes was a contrarian, meaning his flow of thought was against the grain of the current popular school of thought. Your Bottom-up model is quite a contrarian too.
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His policies which later grew to be known as Keynesianism are centred on the thinking that when the economy or sections of the economy are highly depressed, the government can utilise structured money creation to create the requisite money stream to stimulate both demand and supply.
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In today’s economic terms, it is known as Deficit Funding.
President Roosevelt ordered the creation of massive national infrastructure projects, large labour-intensive public works programmes and a wide series of arts and creative projects.
This then created massive demand. To fund it, he didn’t rely on taxes which had diminished with the depression. He instead created the money and paid for it all.
Yes, he printed it. He printed it and spent it on these projects that spurred bulk employment and mass supply of goods and services. It reignited the economy.
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Bridges, schools, libraries, hospitals, roads and airports were built. Music, art, plays and songs were commissioned. Teachers, nurses, doctors, researchers, engineers, drivers, technicians and people from numerous other jobs categories were employed. The result was that poverty was almost quashed and personal dignity was restored.
In fact, the USA has utilised deficit funding as a standard add-on to its budget every year since 1939.
The amount hovers around 30% of its total public budget but in 2020 it shot to 50% with the additional funds being the massive war chest of about $ 5 Trillion they used towards the fight against the pandemic.
One can see why the USA and much of the West seem immune to the recession facing Africa and Asia.
Your bottom-up model is brilliant, but if you want to afford its ideals without the catch-22 situation of either burdening citizens with new taxes or borrowing new loans kindly consider Deficit Funding.
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It’s not about printing as much as one can. No, there are real limitations and real dangers to over-creating but the limit can never be financial.
No, the real limits are inflation and availability of resources and that’s why for this to work effectively you will need Deficit Funding professionals to propose and guide the process at State House, Ministry of Finance, Central Bank and Kenya Revenue Authority.
With this, you can introduce concepts such as a National Basic Income Job Guarantee Programme which will employ All The Unemployed at entry-level jobs such as cleaners, messengers, street sweepers, armed forces, police, forest officers, wildlife officers, farmhands etc.
Aren’t these the bottom uppers who believed in you? What will be the resultant effect on production, climate change, public service delivery, demand for basic goods such as tea, bread and eggs from the private sector? Kenya should recover within 12 months.
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The writer is Tony Mwiti, a Progressive Economist, Deficit Funding Expert and Political Advisor.
The views expressed here are the writer’s and do not in any way represent the position of TUKO.co.ke.
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Source: TUKO.co.ke
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