In human history, so many economic crises have happened and so many people have been badly affected due to economic crises. Most of the people have lost the job and they should have suffered to get the necessary goods from the market, this kind of situation will happen in every economic crisis.
If we look economy crisis in 1929, this crisis had been happened due to falling of share market price, we can easily handle this kind of crisis by applying a new model of buying and selling of share in the secondary market, if you want to know about a new idea, you can read my previous article name New Economy Model Realism where I have described how to conduct share market in a new way, after applying new idea share market never will create any problem in the economy.
Another economy crisis had been happened in 2007,8 reason of this economy crisis is that housing companies had made a lot of houses in this period. In the beginning, the housing company had got maximum profit by selling houses then so many new investors entered this industry and they had made maximum houses than market demand. After making a lot of houses, they could not sale in market then they could not pay bank loan on time. Most of housing companies had declared bankruptcy. After collapsing housing company, so many banks had got problem to issues new loan for other businesses after so many people got lost job, after lost job all kinds of demand of products and services would have decreased. After decreasing demand, obviously supply also would have decreased, after decreasing supply so many new jobs had been lost. This situation had been spread out around the world. That time also many people had badly affected and so many people had committed suicide. We can easily handle this kind of situation before come out in economy. To control this kind of situation central bank can make monetary policy for commercial bank and impose rule upon commercial banks for restricting maximum credit in one area. In 2007,8 if central bank controls the maximum credit in housing area then that kind of situation would not be happened. By falling demand in any area can be created problem, if we able to handle on time then economy crisis never be happened. For example, motor company has made 500000 fuel cars but due to falling demand company cannot sale on market. If this situation staying long period then car company cannot pay bank loan after that economy problem will be started. To manage this situation on time investor should take some loss, the related bank should make interest free and government also should get tax free on those cars after taking those action car price will become in low price and easily can sale on the market after that possible economic crisis will be ended. This kind of simple idea we can apply in every area if future problem is near.
But the current pandemic problem is different, it has affected everywhere and also a long period as well. If we look in the economy, many businesses have got lost a huge amount of money. So many businesses are being conducted from many years ago but within 6 months they all have collapsed, it is a terrible situation for society. By doing business in the long period they have increased their facilities like they have bought facilitated home, car etc and they have been paying instalment at the bank but after pandemic started, they could not pay their instalment and they could not pay rent of business houses and so many problems, they have been facing. Huge numbers of people have been suffered from this situation. Nobody knows the solution some people started to cheat and loot to others for survival and some people have committed suicide because they don’t have an option. For example, one of my friends has run one restaurant by investing 100000 euro in 5 years ago. After started pandemic, sales of restaurant totally decreased and he could not pay rent of restaurant, he could not pay of business loan, he could not pay his apartment loan, he is living in a totally uncertain situation, he does not have any option to overcome from this situation, if the situation is normal he can sale his business but this situation nobody wants to buy and he doesn’t want to declare bankruptcy because he has invested 100000 euro and has been doing hard-working every day in the year with his wife from 9 am to 11 pm. If he declares bankruptcy, he will be in more problem if not declares also in problem. This kind of problem has happened so many small businesses and big business as well. Some European countries and the USA have been applying some ideas to overcome from this situation as Keynes said. Those countries have been easing credit facilities, decreasing interest loan and injecting direct cash to businesses. But those actions are not being sufficient to overcome from crisis because the crisis period is being longer as we think. That’s why Keynesian theory also doesn’t work properly. I am looking very nearly this situation and observe the ideas by applying to different countries. None of any country has applied any new ideas in this situation. So, I have created a new idea which is useful to overcome this situation and also useful future coming to this kind of economic crises. So, I kindly request to the world-leading economists please start to discuss my ideas which really beneficial to the society in the economic crisis period, leaders, related persons easily listen to your voice but nobody wants to listen to me even my ideas may be useful for applying because I am cleaner. People look at my qualification and my post rather than my ideas and solution that’s why I kindly request to world-leading economists.
Before we create any solution, we should observe deeply the current problem. If we look in any business-like restaurant, all necessary assets like furniture, fridge, kitchen set up etc all are there with good condition but selling is falling that’s why getting loss. if normal situation some businesses can get lost and close and will open a new one, it is the normal process of the business economy. But this situation is different most of the businesses has got a problem. If all businesses close due to loss then the more big problem will occur in the economy. We should not close businesses, we should take care of them by managing macroeconomics. Due to falling sell, a business cannot pay bank loan and house rent, the house owner cannot pay house loan, a bank cannot collect instalment from customers. This is the main problem of the current situation.
Just we can assume that if all business activities are being run by the government like a communist country, they can easily handle the situation. Only necessary products and services would be conducted like foods, water supply, electricity, internet, security, health etc whatever goods and services are necessary for survival, those would be functioned and remained would be stopped until crisis situation end. And those people have been given more money who have been working to conduct necessary products and services and remain people have been given survival money and they easily can buy necessary products and services from the market. In a communist country, nobody has badly affected like suicidal situation in capitalism in this kind of economic crisis situation. They simply run those businesses that are really needed to run for surviving. Nobody gets any lost and nobody should suffer to pay any bank loan and rent of house because they all have belonged to the government, people have worked and getting money and buying normal products and services that’s why communist government easily can handle the economic crisis. But in capitalism and socialism, there is a problem, the government cannot pay all loan and of rent of businesses. Because the government also suffer to collect necessary taxes from businesses in this situation that is the main problem. By seeing this situation Keynes said that in long term everybody will die. But in my opinion, he had given solution for short term crisis he also failed to give a solution for the long term because he was unable to understand the macroeconomics mechanism.
If we observe deeply if the communist country can easily handle the crisis period then capitalism and socialism country also can easily handle this situation but some big actions must be taken by the government otherwise not possible. The government should declare emergency of economic crisis, after declaring an emergency, only most necessary works should be allowed to conduct like food, water supply, electricity, internet, wastage manage, health services etc. remained unnecessary businesses must be closed to control the spreading virus. By closing so many businesses, they all getting lost but we can apply the same formula as applying communist government. People who are in working necessary areas, they must be given a normal salary, and the rest of unemployed people have been given money for just survival facilities by the government. In this situation government can reduce their expenses by giving lay off to so many government employees like official staff, some police, some army etc. after that government can give money to everybody for survival who are in not working any fields. If the government doesn’t enough money, the government can take a loan from the central bank and central bank can give by taking a loan from commercial banks and also can print new money as well but in this situation, cash has been enough in commercial banks so new money should not be printed. Most of the people can live inside the home by taking survival facilities which have been provided by the government after that spreading virus will be decreased. But same time so many businesses would be collapsed due to bank loan and rent of the business house. To save all businesses, we must freeze the time period. We should assume that time is stopped for some period, nothing is allowed to increase in the period of emergency declared. To be clearer that all interest of bank loan as well as the interest of depositors must be stopped. And all bank instalments would be stopped. All house rent would be stopped. If restaurant sale is stopped, his house rent should be stopped, then bank instalment of house owner would be also stopped. If most of the activities are stopped then the bank can give lay off their large number of staff. After that bank also can easily survive because the bank also should not pay their house rent. All situation can easily convert like a communist country after that nobody should suffer from the economic crisis. After the situation comes in the normal way then all activities will run the normal way. For example, the pandemic has started December that government could declare emergency of economic crisis for 6 months then all unnecessary businesses would be stopped for 6 months then nobody should pay any rent, interest, instalment to the bank and house owner. The bank should not pay their house rent, should not pay interest on depositors then the bank can easily give to interest-free to their customers who have taken the loan. Some people want to take their money to transfer foreign country to earn interest but after declaring emergency people should not be allowed to take their money to transfer foreign country without special reason that’s why emergency period must be imposed to control the situation. After finish emergency period all activities will be started as normal and again start interest and loan from the starting period like a restaurant should pay rent of July and instalment of July from January to June all are stopped. That idea can be easily applied and everybody can get the benefit. Nothing bad situation will have happened; I have thought 1000 times before coming to the conclusion. If business activities are stoped then monetary activities also should be stopped to make balance otherwise people have been badly suffered by the crisis. There is no way to escape fro crisis until stopped increasing monetary value.
If we apply this mechanism in capitalism model when a crisis happens then people never be suffered in capitalism by this kind of pandemic. There is no better other option to manage long term economic crisis. I hope any country may apply my ideas and overcome this situation. I have described about money can be handled only by the central bank that you can also read in new economy model Realism that concept has been launched by China. I am not confirmed that China has taken my ideas or not but I have tweeted and sent an email to most of the countries of the central bank about my new ideas where I have described how can be removed interest and central bank as well. Thank you for reading.
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