December 9, 2022

Recently reports in prominent American media have discussed a reputed survey, which claimed a majority of Americans indicate the U.S. economy is passing through its most difficult phase and needs a new direction. The survey noted that Americans think that both democrats and republicans are devoid of political ideas to bring the country out of its present economic crises and blame them for created it collectively.

I present directional solutions to six heated issues respectively related to US economy and that have received extensive debate in American media: Unemployment, health, education, illegal immigrants, financial crises, and the fiscal deficit.

The high unemployment can be addressed more effectively if the USA gets freedom out of the tyranny of its misconceived notions and prejudices. The federal government should gives jobs directly to the unemployed through an “Employment Guarantee Program.” After all heavens will not fall on the capitalist (as opposed to socialist) economy of USA if 10 percent of unemployed Americans are given job directly by the government.

In the name of creating jobs and removing unemployment in the wake of on-going economical crises so much dirt has been unnecessarily created by both republican and democrat administration. The resulting bailouts, allowances and stimulus – even to inefficients and shirkers – has destroyed the reputation of USA world over as a competitive and free market economy. It has also created crony capitalism, wasted interests and lobbies for perpetuating these unethical and predatory policies. All this without any worthwhile result regarding the eradication of unemployment.

It is true that Employment Guarantee Programs have not worked successfully in some countries. Consider that the reason is usually simple – that people who aspire to become ministers in those countries sometimes cannot run a factory or other industrial business activities efficiently and profitably. The USA would not face this problem and would find capable ministers to run such programs efficiently.

Nothing is bringing more disgrace to the USA than its policies regarding health and Medicare. Any body who has lived both here in other countries would know that hard working and enterprising Americans create a prosperous economy. Incomes of various economical groups are comparatively more in purchasing power parity (PPP terms), but here the cost of living with the exception of Medicare (on PPP values) is also cheaper than even developing countries.

But Medicare, despite the good intentions of the Obama administration to ease-out the situation is utterly absurd. Without wasting further time and energy on this issue the USA should immediately make Medicare services free for all the citizens: consultation, treatment, pathological and other tests, surgery, medicines etc.

Health services should be categorized at six levels – starting from primary health centers in village and wards of municipalities, to metros and to thousand bed hospitals with all the medical equipment and surgical facilities at the district and county level.

The financial and administrative burden of the lower three categories should be on State governments. Whereas this burden regarding the higher three categories should be on the federal government. This policy will not only take care of the health of Americans from the date of their birth till they die a natural death but will also simplify the process and with less burden on the US economy and the Medicare. It will also rid the USA of the ridiculous cobweb present in its medical system and unnecessary entry of insurance sector which is making health services a complicated and worthless affair for most of the economically humble Americans.

The media is full of news expressing anxieties about an educational system that is not producing enough citizens to take care in an increasingly globalized and high-tech economy. This problem can also be solved if education is made free at all levels.

Education in the USA should be categorized at six levels – starting from primary, secondary, higher secondary, undergraduate, graduate up to doctorate level. The financial and administrative burden of lower three categories should be on State governments, whereas this burden regarding higher three categories should be on federal government.

Easy loans – in terms of installments and rate of interest – should be given to the students seeking medical, technical or specialty education and would be recovered from salaries and incomes when they start earning.

There is a failure of US policy to address the problem of illegal immigrants as made apparent with the recent legislation in Arizona. The USA is trying to put the entire burden – such as fencing, increased high tech border patrolling, anti-illegal-immigrant laws, etc. – as a solution of the USA only, while leaving the offending country of Mexico un-burdened in this challenge. The USA is a country having onus of providing leadership for the process of planting globalization all over the world. It is not taking the “Rule of law” with requisite utmost seriousness. Therefore the US government should immediately: identify and track illegal immigrants; demand Mexico take their citizens back; and if Mexico refuses then demand commensurate territory from Mexico in order to economically sustain illegal immigrants on US soil; and in case Mexico refuses then in a time-bound program, take this commensurate territory militarily from Mexico.

The sub prime crises of the US banks which culminated into the present global economic crises are still occupying much time and energy from the government and other financial and banking institutions. To avoid such crises in the future will require justice in consonance with radical change, in the composition and functioning of US banking and financial sectors. Fixed deposits in banks after one year and loan-able funds of other financial institutions should be converted into shares of the banks and financial institutions.

The source of the current financial crises is the result of bank management and lending institution speculation and gambling in sub-prime lending on the basis of some one else’s money. First and foremost, the Banks should be bifurcated in two institutions.

Banks as lending institution that will lend on interest, and “safe vaults” that operate saving accounts and keep valuables such as gold, ornaments, documents, etc. Safe vaults should not be allowed to lend money on interest to public. Only in cases where there is excessive safe vault funds should banks be allowed to give to the government only for nominal consideration of its operational expenses.

Ultimately it is money from the accounts of fixed deposit holders that is lent on interest to borrowers that makes banks function. The fixed deposit holders are the real beneficiary and stake holders in any bank Therefore these real fund providers should not only be considered the real owners and management of banks but they should also be responsible for any tempting offer to borrowers and risk that is inextricably associated with the business of money lending on interest.

Fixed deposits for different durations should be allotted different index numbers. For example some for 1 to 5 years, another for 5 to 10 years, another for 10 to 15 years and so on. At annual general meetings of the banks and the lending institutions with loan-able funds as shares, the share holders would votes on which value is equal to shared value and multiplied by its index number.

Banks and other lending institutions can function as any other limited company with e-voting rights for every shareholder, in addition to right-to-vote in person at general body meetings. It is amazing that in this age of electronic banking that e-voting and the democratization of the corporate sector is denied and that a minority shareholder present at general body meetings is empowered to make decisions that are crucial and vital for the limited companies of the corporate sector.

Just as with banks and lending institution ownership laws, the regulations regarding cash reserve ratio by regulators such as the Federal Bank can also be suitably amended. These ownership laws are all the more required for the simple reason that the regulators like Federal Bank are hopelessly incapable to guard against reckless lending and bad debts.

It is not merely the function of cash reserves, margin money, collaterals, mortgages etc. to make a loan a so-called secured one. It also involves a legal recovery mechanism that is time consuming and at the same time not the end of it all.

Rather, after a decree in favor of the banks the possession and resale for realizing the funds, is in itself a prolonged and cumbersome process. Therefore, such practical issues are best left not to regulators but to the real beneficiary and stake holders – the proposed share holders of banks and lending institutions.

The noise created at recent the G20 summit in Canada over public debt is much ado about nothing. Though EU countries were alarmed due to increasing public debts that create problems with debt servicing not only in Greece, but to some extent in the more developed EU economies. This is issue needs deeper analysis.

Nothing has done more harm to mankind including to USA than the unqualified terminology of “fiscal deficit”. There are two ways of bridging fiscal deficit. One by borrowing money – which does not increase money supply and merely shift money from private persons to government; and the other by printing currency notes which increases high power money with a multiplying factor and has disturbing implications for the economy. The federal government should stop using unqualified fiscal deficit in its budget and instead use the term “debt fiscal deficit” and “money fiscal deficit”.

As far as money fiscal deficit is concerned, it should be religiously avoided and currency should be printed only against equal asset back-ups, whether metallic under physical possession or real estate under constructive possession of the money issuing authority.

The USA need not loose sleep over ‘debt fiscal deficit’ which is best be left to the wisdom of the lenders to various governments at their risk – something every investor is supposed to take.

Moreover, by process of a constitutional amendment all state governments should be allowed to borrow money against the security of their consolidated funds just as the federal government. The total borrowing of any government should not be constitutionally allowed to go beyond a certain percentage – say 70 percent of the maximum worth of its consolidated fund of current financial year.

Yours truly

Hem Raj Jain

235, Jaycee Ct, South Ridge Mankato, MN-56001

Ph: 612-202-4053

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