To the Editor:
President Trump is currently in a state of denial.
The two problems which we must deal with now are health and the economy. Those who wanted government out of their lives are asking for immediate help. It’s hard to plan without effective leadership.
The Federal government has two major tools to fight an economic crisis. Monetary policy involves interest rates and the money supply. With lower interest rates the potential problem is that companies and risktakers will take foolish risks when the cost of borrowed money is low.
Consumption constitutes 2/3 of the economy. If correctly implemented, lowering interest rates and increasing the money supply can help consumers to avoid a credit squeeze.
The other tool of the government is fiscal policy. This might involve rebuilding the American economic infrastructure including roads, bridges, and renewable energy. The problem is that of time lags. There are three time lags. The first is recognizing the problem. The second involves creating policy through legislation. The third is to implement policies.
The best response for each individual is to be prudent. The person who keeps his head when all about him are losing theirs will prevail. History is replete with panics. The South sea bubble, the Florida land speculation, the crash of 1929, and the 2008 sub-prime credit freeze all involved panic and hardship. Politics is always personal. Losing a job and insurance can change a family’s position on public policy such as Medicaid, food stamps, student loan forgiveness, and the tax system.
Every tax system creates winners and losers. The middle class and the working class are certainly not winning.
Roger Lee Green