Call to Invest in Infrastructure, Industries and Technology to grow the Economy

The greatest investment experts in America have all rallied behind U.S President elect Donald Trump…….their advise is he can make American great again…..and that is to invest more in Infrastructure, Industries and Technology…..

What is Papua New Guinea waiting for? This advise is FREE!

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President Trump, You Can Make America’s Economy Great Again. Here’s How

By: Richard Duncan

I have just uploaded a Macro Watch video in the form of a presentation to President-elect Trump. I believe it is the most important video I have ever made. Here’s how it begins:

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President Trump,

You CAN make America’s economy great again. Here’s how:

INVEST, Mr. President – not only in infrastructure but also in the industries and technologies of the future.

You have been elected President at a unique moment in history that gives the government of the United States the ability to borrow and invest in the US economy on a scale not only large enough to rebuild America’s infrastructure, but large enough to also induce a new technologic revolution that would restructure the entire economy and make it great again, greater than ever!

If you grasp this opportunity, the United States will have unassailable supremacy in the industries of the future; you will lock in another American Century; and you will improve the well being of every American – and the well being of every person on this planet.

However, you have also been elected at a time when the global economy is in grave danger of collapsing into a depression, one from which it might not recover for decades – if ever. One misstep on your part and instead of making the economy great again, you will make the Great Depression again.

Here’s what you need to know and to act on to succeed.

The global economy is an enormous economic bubble that has been inflated by Credit. If the Credit contracts, the bubble will pop and the New Great Depression will begin. If interest rates go up significantly, the bubble will pop and the New Great Depression will begin. One wrong move on your part and the economy will spiral out of control into a depression. It won’t be short and sharp like 1921. It will be long and devastating like 1929 to 1945. That’s the bad news.

Here’s the good news. You are absolutely right to call for government investment in infrastructure. DON’T STOP THERE. During your administration, the government can borrow and invest trillions of dollars in the US economy without causing inflation. The combination of Globalization and Fiat Money makes this possible.

You not only have the opportunity to rebuild American infrastructure so that it is second to none as you promised to do in your victory speech. You also have the opportunity to invest in 21st century industries and technologies on a scale that is too big to fail, thereby guaranteeing that the United States remains the most prosperous and powerful country in the world for many decades to come.

In the past, the government could not run large budget deficits without causing high rates of destabilizing inflation. Today, the United States government can borrow and invest many trillions of dollars at little to no cost – and do so without causing inflation.

In this presentation, I’ll explain why. I’ll also describe the kind of government investment that is required to pull the United States and the world out of this economic crisis – and the extraordinary benefits that such investments would produce.

The stars are aligned. You instinctively understand the desperate need to invest in American infrastructure even if that means increasing the national debt AND you have the political clout to make sure that Congress funds this investment, something it was unwilling to do until now. At the same time, the combination of Globalization and fiat money makes it possible for the US government to borrow and invest trillions of dollars at little or even no cost whatsoever. Now that you have shattered the taboos that blocked fiscal stimulus and an increase in the national debt, all that remains to do is to determine is what kind of investments will generate the greatest benefits – and then to make those investments.

This is a once in history opportunity, Mr. President. Grasp it. INVEST. And make America’s economy greater than ever.

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Time to Increase PNG’s Debt to GDP ratio to its “Optimal Level”

By Government Insider

In a previous article, we raised a question “Is PNG bankrupt“? and we compare its debt-to-GDP ratio with other countries. This article follows from the previous one……

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Few issues in politics and economics are nowadays more discussed – and less understood – than public debt. Many raise their voices to urge for reducing the debt, but few explain why and in what way reducing the debt would be conducive to a better economy or a fairer society. And there are no limits to all the – especially macroeconomic –calamities and evils a large public debt is supposed to result in – unemployment, inflation, higher interest rates, lower productivity growth, increased burdens for subsequent generations, etc., etc.

People usually care a lot about public sector budget deficits and debts, and are as a rule worried and negative. Drawing analogies from their own household’s economy, debt is seen as a sign of an imminent risk of default and hence a source of re-probation. But although no one can doubt the political and economic significance of public debt, there’s however no unanimity whatsoever among economists as to whether debt matters, and if so, why and in what way. And even less – one doesn’t know what is the “optimal” size of public debt.

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Insert: PNG Debt to GDP ratio since 1997

Through history public debts have gone up and down, often expanding in periods of war or large changes in basic infrastructure and technologies, and then going down in periods when things have settled down.

Public debt is not like private debt. Government debt is essentially a debt to itself, its citizens. Interest paid on the debt is paid by the taxpayers on the one hand, but on the other hand, interest on the bonds that finance the debts goes to those who lend out the money.

Today there seems to be a rather widespread consensus of public debt being acceptable as long as it doesn’t increase too much and too fast. If the public debt-GDP ratio becomes higher than X % the likelihood of debt crisis and/or lower growth increases.

But in discussing within which margins public debt is feasible, the focus, however, is solely on the upper limit of indebtedness, and very few asks the question if maybe there is also a problem if public debt becomes too low.

Whatever the problems of low public debt or high public debt, most economists would agree that the optimum level of indebtedness would be 50%…….maybe it’s time Papua New Guinea increase theirs as well.

 

​Advantages and Disadvantages of Budget Deficit

By: Saipriya Iyer

In layman’s terms, deficit budget occurs when spending exceeds income. The following article enlists the advantages and disadvantages of deficit spending.

Widely used in the disciplines of economics, finance, and the government, the meaning of deficit spending varies according to the context. That said, the underlying principle remains the same, i.e., less income, more spending. The subject has also been a topic of world-wide debate amongst economists. While liberals maintain the opinion that this concept increases economic growth, conservatives argue otherwise. The theory is outlined in the following paragraphs, along with its positives and negatives

THE THEORY

  • When a person or the government spends more than he/it makes, the concept is referred to as deficit spending.
  • Deficit spending by the government needs to be financed through some other means of financing.
  • Since the spending increases, the economy tends to increase.
  • The excess borrowing from other sources, however, can have serious consequences later.
  • Renowned economist, John Maynard Keynes, supported the concept of deficit spending during a recession.
  • However, excess debt is a constant accompaniment to deficits, and this results in improper planning or capital mismanagement.
  • The pros and cons are decided on the interpretation; an advantage may be considered one until it gives beneficial returns, otherwise, it can prove to be a loss too.
  • To be more precise, say, due to deficit spending, the government spends more on infrastructure, which is good for economic growth. However, it needs to borrow heavily from other nations, which is a disadvantage in the long run

ADVANTAGES

Increased Economic Growth

  • It is considered one of the positives of deficit spending.
  • When a government spends excessively, it can afford to buy infrastructure for the country.
  • This, in turn, leads to employment of labor force.
  • As more money flows into the country, the overall economy growth rate accelerates.
  • This is especially useful during a recession, as this can stimulate jobs, increase businesses, private investment ventures increase, and consequently, the nation’s economy rises

Control

  • Deficit spending leads to a budget deficit.
  • Running a budget deficit assures that the government bodies think twice before making unnecessary investments.
  • The interest rates matter as well, and a higher interest will force them to think of plans to pay back the debt as soon as possible.
  • It needs to impose more taxes so that the interest rates do not matter a lot.

DISADVANTAGES

No Savings

  • An individual/government will have no savings during a deficit period.
  • This is extremely problematic as during emergencies, there will be no stash to rely on.
  • This leads to excessive borrowing from other nations, that too at a high interest rate.
  • Excessive debt continues to pile up and a vicious circle is created

Rising Costs

  • To retain the excess expenditure, government increases taxes.
  • Prices rise more than usual, this leads to inflation.
  • There is a drop in the standard of living, ultimately resulting in a sorry state of affairs.

Foreign Expenditure

  • Though the government borrows from other nations and this leads to increased infrastructure, the fact remains that the borrowing is done at a very high interest rate.
  • Money does flow in, but the debt remains; the actual investment of the country does not increase, taxation reduces, and the debt keeps piling up.
  • Subsequent measures need to be taken to pay off the debt and increase the internal revenue.

POINTS TO PONDER

  • Most economists with a neutral view, suggest that the right kind of spending can spur economic growth.
  • As mentioned earlier, this subject is a topic of debate amongst the conservatives and the liberals.
  • Herbert Hoover, one of the economic experts, was openly against deficit spending around the Great Depression, because he believed that deficits would destroy the country’s foundations.
  • Keynes, of course, as mentioned before, supported deficit spending, especially when the country is financially downtrodden.
  • Another important point – do not confuse deficit spending with fiscal responsibility, the former is used as a tool of the latter.
  • The borrowed capital from other nations can also be used for public spending, like education or transport.
  • Borrowing heavily from global trade markets and international funds can affect the sovereignty of the nation.

History has depicted that a balanced budget does not guarantee a steady economic growth. Government spending increases the scope of private investment, and the effects of public borrowing on the same are significantly erased. All the same, to make use of the situation in a profitable manner is dependent on the individual, the organization, or the government.