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Eureka: Six ways to fix slow growth and recessions
by Joseph Gatt
2017-02-08 10:39:48
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There are more than six ways to fix slow growth and recessions. But the following six ways are a good way to start getting out of the recession. The recommendations are in no particular order.

growth011- Getting out of debt

Getting out of debt is not rocket science. All you have to do is make a list of the people or institutions you owe money to, rank the creditors from the highest to the lowest, and start paying the lowest debt first because that’s the one that will have the highest interest rate, before you finish by repaying the one with the highest loan.

Getting out of debt means making a few sacrifices, so you probably shouldn’t be building skyscrapers or flamboyant statues of your leaders if you are heavily in debt. The debt advice applies to household as well as public debt.

2- Focus on the goods and services

One thing I find strange is very often those in charge of the economy look at the figures or numbers but rarely think of the economy as trading goods and services. Land can be considered a good, labor is a service, fruits and vegetables are goods, a haircut is a service. Of course numbers are important, but economic policy should enable an easy flow of goods and services traded for cash.

3- People usually don’t like change

As strange as it may sound, although some swear they like adventures and moving to distant lands, most people in healthy economies don’t like change. They want to live in the same city, live in the same apartment and work at the same job. They will only change if their safety is at risk, that is if their coworkers are being violent or if there’s a drugs epidemic in their neighborhood. So if you live in a safe country or have safe neighborhoods, you don’t need to build new towns, because very often they end up being ghost towns.

4- Gambling and lotteries are always a bad idea

When governments need money, they organize raffles, gambles and lotteries. It’s a good way to repay the public debt, but you’re only really transferring the debt from public to household. That’s mean.

5- Price fluctuations

If I own a bakery in a crowded street I can provide bread at a reasonable price. If everyone else owns a bakery on the same street I might have to sell my bread at a loss. It’s the same thing if everyone else on the street owns a bar and I own a bar, if everyone else sells fruit worldwide and I sell fruit, etc. etc. So rules, regulations, forums and so on should really focus on how not to get supply to go crazy.

6- Finance

When the dollar was pegged to gold, it meant you could only print as much money as you had in gold. Since 1971, countries have been allowed to print as much money as they want. If you can’t get money through a lottery, you might as well print money to repay the public debt. This means you’re taking people’s savings and repaying the debt with it. That’s assuming people do have savings. The best way to fix an economy is through a healthy flow of goods and services, not through finance itself.

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