Organized & Planned Deficit Spending
Budget Deficit will Generally Increase Equilibrium Output
Distributed Equilibrium Deficit Spending (DEDS) =A Macroeconomic Model without taxes, without shortages of monies/capital, no inflation and no displacement of relevant personnel. (a.k.a O/PDS=Organized/ Planned Deficit/ Spending) . For our purpose, we will call the model: DEDS/O/PDS.
This brief is India Specific, though DEDS/O/PDS can be universally applicable. I have written this to be India Specific because I would like to see our backyard in order, before I attempt to put others into order. India still has 900 million people living at a standard of living close to how animals live, and in fact, in India there are animals that live better than most Indians. These 900 million citizens have to be addressed first before we look at others past our international boundaries. These also present to all, the hugest business/commercial opportunity in the known free world. A 900 million strong consumer/producer potential waiting to be kick started, and not to forget the approximately 400 million existing consumers/producers……as reported.
Populations should be looked at as an asset of huge markets, who produce and consume at the same time, but without the implication that population should be encouraged to grow without and beyond control.
Today: If, I, as an economic unit want to produce something, I need money. If I want to consume something, I need money. If I do not have money, I really am not a producer or a consumer, in the real tangible sense. But if I have access to money, in a controlled and efficient manner, I, as an economic unit, would produce and consume, adding to the bottom-line...The GDP... the entire population (1.3 billion) of the economy could then become an economy of producers & consumers, perfectly coordinated, in such a manner, so as to produce no inflation, and at the same time achieve market equilibrium for every pre-identified product(s),good(s) & service(s). Equilibrium here and hereafter in this book means market saturation or full supply to the market.
It does not mean where the demand and supply curves intersect each other. By extrapolating, the market economic end would be to satiate demand for any pre-identified product(s), good(s) or, service(s) , with a corresponding supply match of such pre-identified product, good or service, which would be optimum in quality & pricing, and exact in quantity demanded, and have just the right numbers of different choices offered for each pre-identified product, good or service in question, even if it means, to eventually produce deflation as a result of such economic activity. Note that the biggest bureaucrat, or the Red Tape, in the meaning to understand these being blockers of the biggest type; is Money. If I want to make a TV, and if I do not have money, I cannot do so. Also if I want to buy a TV, and if I do not have money, I cannot do so. So lack of money in an economy is like arthritis is to a champion golfer.
Do note, however, that one does not have to produce, but has to consume. This is how Nature made us. And as a natural consumer, arguably the state should provide a good standard of easy access to the basics at least, with luxuries and desires being met by economic activity that also would be provided by the state, directly (public sector & joint sector) or, indirectly (Private sector). For example, food can be given free at a state restaurant, but if one wants to buy a TV, then one would have to work (as in any type of acceptable local currency economic activity, which might be a job in the state government itself or, a private job or an individual business, so as to earn the TV.
DEDS/O/PDS is theoretically sound and very practical, and would require minor adjustments in the existing economic structure, to bring into existence.
The broad skeletal framework of DEDS/O/PDS is as follows:
3)That organization of the economy in question, which controls the Mint, prints money, with the government of this economy, being the custodian and distributor of these monies or, its electronic velocity. It is also to be noted, that capital/monies thus acquired are not from any “one person(s)- whether male or female, God or Goddess”, but only from The Mint, which is not animated, and only a non-living “machine” in its specific currency printing engineered capabilities, made and run by a government for the economic purpose only. It should be clear from the beginning that these capital/monies are not government owned but publicly owned. The government comes and goes but it is the public that decides the government; at least in what is supposedly Democratic India. The amounts of monies that are available from this mint are infinite, and are a function of how much the government in charge is willing to spend: spend in a planned or organized manner, the manner of which is explained later on. It is to be noted that Modern Monetary Systems are totally electronic with electronic digital credits and debits operating from one another’s cell phones (as an example).So you can pay electro digitally from your own cell phone to the bookstore owner’s cell phone and pay for this magazine.
Do take some note here, that the Government, in such scenario, (as it is not taxing anybody) pay itself amounts which could usher in a zero corruption form of governance. The Government can pay its bureaucracy, public sector government companies, organizations & departments. Do not forget 'Politicians'. They would be judged on how and where they spend monies made available to them.
Corruption is a direct result of an inherent bottleneck in the relevant economy. The surplus economies tend to have no or very little corruption, while shortage economies face corruption. In any economy, if there are only 50 desirables, or only 50 necessities. But 200 economic units, corruption could and would most likely happen as 200 economic units will be vying for only 50 necessities.
However, in an economy, if there were only 50 desirables or only 50 necessities, and only 40 economic units so there would be no chance of corruption at all. This because there would be 50 necessities for only 40 economic units in this economy. As such, in this case, there would be a potential of export of 10 such desirables/necessities.
So to uproot corruption in all economies, one has to get rid of all economic bottlenecks which exist in the demand/supply of State pre-identified products, goods or services. And if there is corruption in any surplus economy(ies), then this/these economy(ies) should be avoided like a person with bubonic plague, and branded a rogue state economy, by the international community.
The government should start applying DEDS/O/PDS. The step would have to identify an economic unit (be it an individual or a family) and thereafter pre-identify a basket of products & services which every economic unit should enjoy, and so as to supply the same to the economic unit.
Thereafter, the entire economy consisting of the sum of its economic units would build up to producing and consuming the pre-identified basket of products and services. In this manner, the government would know beforehand, what it needs to produce and what will be consumed and will accordingly provide (also, if required, print) the monies required to execute these economic activities (ies).
As per the Government, this is the sole custodian and distributor of the so-called “printed” monies, and there being no limit to its requirements of monies, it should and need NOT tax at all…..
A note on Taxes: Taxes are a monarchist phenomenon, and cannot be considered in true democracies & capitalistic economies, as this would be contradictory to the very basic principles of democracy & capitalism. If taxes were purely voluntary then these could be considered as democratic. Monarchs taxed for defence or aggression, which is not required now; with the concept of peaceful respect of the different borders of various economic states gaining ground, and peaceful, good economic/commercial activity being the ground for economic engagement or interfaces. Economic activity or economic bases that have to do with the manufacture of arms, ammunition & weapons are to be frowned upon, or highly regulated.
These ‘printed’ monies are then channelized into the Demand (I prefer calling Demand: Request.) and Supply “Pipelines” in such a manner, that the government administrators of DEDS/O/PDS, see to it That One unit or more of money put in the Demand channel, produces One unit or more of actual physical Supply. This demand-supply match has to be physically made for each pre-identified product or service so that market equilibrium for such product or supply is maintained and eventually reached. Assuming the Supply lag away, the amount of monies distributed for a match by actual physical supply, or production of a pre-identified products, goods or services, can be magnified many times over, as long as such Demand- Supply matches continue all the way to market equilibrium, and eventually full supply for the demand of any pre-identified product, good or service. This assumption of assuming the supply lag away is important, in that for example, if the government of this economy were to decide that every economic unit should be able to buy a TV (now a state/government pre-identified desirables product for every economic unit) , and assuming the sum of economic units are 1.3 billion people, then it would take time to set up the production capabilities to manufacture 1.3 billion TVs. At the same time, it would also take time to provide employment to the economic unit so that the economic unit (One person in this case) would be able to earn enough by the manner of any type of acceptable local currency economic activity, which could be a job in the state government itself, so as to pay for his/her desirable TV. However, if you live in a state whose currency is internationally sought after then that state could reduce the supply lag by just importing TVs and if the state was a welfare state then TVs could be given free of cost to the state’s citizens also.
Tax experts say that another purpose of the tax is to create an equitable distribution of wealth. However, with the Government in charge of THE MINT, the government would be able to distribute wealth in a better and more efficient & equitable manner, as it would be in charge of enabling producers & consumers.
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