Monetary and Fiscal Policies;Main differences of the Marketizm's Monetary and Fiscal Policies and the current ones from a Macroeconomic prospective are the ways the Monetary and Fiscal balances are achieved: when the currently used balances are based on a cash method: Income to Expenses; the new ones add on an accrual method: Equity to Debt. Or the securities coming from the Equities are taken in consideration for the Monetary and Fiscal policies.
In a way it is as the current Company's Accrual accounting and general underwriting policies. Thus the evaluation of an Economy and Country's Current Level of Development is rated corresponding to the Current Level of Possibilities in Global prospective. Additionally the new "underwriting" will give the corresponding more adequate numbers for Monetary quantities, currencies values, acceptable social expenses, infrastructure expenses, deficit and etc.:
There are two main requirements for such underwriting to be done:
1. general security of the equities/assets plus the Income to Expense ratios.
2. to be enforced and generally accepted by all parties new system of underwriting.
The principles of Security are well known for companies underwriting at least on books so are the evaluation of business activities and the related ratios;
The problems existing in the current business underwriting mostly are consequence of very inadequate business and contracting laws which promote big businesses with their lawyers and lower the security for small businesses and investors as well are the inadequate properties appraising and market values, and inadequate evaluation of intellectual properties, and etc.
Macroeconomic "underwriting" is similar to companies underwriting so the general security applies to Macroeconomic evaluation which consequence to the estimating a Country's economic value it is mostly Market related where the political or militaristic or subjective ideologies effect on a Country's Economic evaluation of the past are well in the past the process of clarification of standing for economic power based on social economic structures and market adequacy are well on its way: the ongoing Globalization and growing productivity are leaving very little or no space at all for such subjective dis-balancing; the market is taking over all of these and making things work if the economic tools of the new developments are properly established and do not work if they are not: Proper conditions for maximizing a developed country's social and economic structures to remain competative could be accomplished by:
* enforcing the rule of law over the business relations the way they are enforced in the civil societies of the most developed countries; a trickle down economics and shady business practices of the Capitalism are enforcing the opposite of the Rule of Law more like some kind of wild west justice which does not enforce the needed security to benefit from the opportunities of the new possibilities of the Market which consequently lower the value of an Economy; as simple as it is the value of the Economy allow it to use more or less resources for such economic factors as infrastructure, social security, medicare and etc. which instead of being just expenses in such an Economy are short term equities because they provide the needed Demand for Goods and Services and provide Capital for Investment. So the theory of Marx goes down the drain because it was founded on a pro-Supply Economics of manufacturing and services and with the new developments the Economy changes into a pro-Demand Economies of investment and international business; the biggest problem of the new developments is the redistribution of Wealth to maintain an adequate Demand and second biggest problem is the security of investment and business income which can bring additional income to small investors and businesses;
Until now-days the Philosophy of Capitalism says that the Economy works by trickling down capital which will eventually transform into production and services which will employ the workforce and such on an on; thus in order such system to work a shady speculating would allow more concentration of capital and things go back to the trickle down. This system has worked for many years quite well because of the localization of the developed economies and the high demands for goods and services which has promoted a growing market even so this process has gone to many crises such as the Great Depression these fluctuations have been result more on technicalities such as Monetary and Fiscal Policies then on the recent at the time possibilities for development because the Demand always has been there and the Supply was always short of the Demand which is not so in the most current developments on the Global Market when the political boundaries of the Cold War or Ideologies have come down and more countries joined the WTO and at the same time technologies in production and communications have given the opportunities for skyrocketing productivity of the most developed economies which allowed export of production to any part of the World and did not create adequate Demand in the less and developing markets and even in the most developed markets because their economies were based on production and services they started loosing Demand too which consequently created a great dis-balance of Supply to Demand ratios;
the old formulas of Economics are not working anymore.
Logically if one follows this pattern will say that it goes to some kind of socialism where the Governments will take over and start redistributing wealth and this might well happen unless....
something else happens: something to keep the Market Free and in the same time to keep up with the corresponding Demand:
How is this thing possible?
Well could be if the Economics changes or improves some of its tools so instead of an chaotic investment and business activities such come under the laws and thus personal liabilities keep manipulations and mishandling of investment under control, and when direct investment can reach less developed Markets and when small businesses could be protected by the laws from their big brothers and they too can reach less developed markets and when overall the Economy of the most developed nations changes to exporting capital in form of investment for profit and export small business operations too so they can earn income. This income from such investment and business must be supported by an adequate and responsive social security and medicare, infrastructure building and educational policies which could provide some of the needed Demand and at the same time some of the Capital for investing and business: the percent of such from the GNP could be evaluated by some formulas.
Here we will come back to the so called Security which must in order the system to work;
it is alike having a cash based business with no assets or business with assets if an underwriter goes over these two scenarios most likely will reject the first or at least put a low estimate of its values. The assets are appraised in regard with their security and long or short term equity value.
Having in mind all of the above applied in the Macroeconomics the factors of security and equity will have similar effect when a Country's rating is evaluated: we will be talking about "security" of the Assets and the long and short term Equity value: both factors are increasing security by ensuring less Market volatility and speculations, and also less currency volatility and also adequate redistribution of wealth and building equity by Social Security, Medicare, etc. and building Infrastructure and Strong Educational system and etc. and by ensuring adequate protection of Invested Capital and Business Practices which will provide additional income through return on the invested capital and profit from expanding business.
Why current system of Economics does not support adequate Market growth for US as well Globally?
*First because it does not provide and ensure needed "security" which will allow expanding Monetary and Fiscal Policies.
*Second because it does not have adequate redistribution of wealth and building of equity for adequate Demand;
*Third because it does not provide the needed laws to protect small to medium investors and businesses
*Fourth It is mostly concentrated on the Trickle down Philosophy of speculations, shady business practices and protection of the big businesses and big investors which are increasingly becoming contra productive in the Current Market Environment backfiring with all kind of instabilities.
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