Volume 8, Issue 15
The world GDP is estimated to decline at least 10% year-over-year. The U.S. economy may decline as much as 7%. These numbers would not be so startling if, in fact, both the world governments in the collective and the United States government in particular were not in so much debt. Debt and debt servicing will have to be restructured.
Advocacy groups are calling on the G-20 (top 20 economies in the world) to forgive the debt owed by developing countries so that what cash they have can be applied to their healthcare systems. The only way to achieve this is with the participation of all major countries, banks, and financial institutions agreeing as one on how to redistribute debt forgiveness on their balance sheets. Otherwise, certain banks will be exposed to failure by carrying an undue burden of non-performing assets. The last time this happened was at Bretton Woods Conference in New Hampshire at the close of World War II.
A looming problem for the finances of local governments is the decline of sales tax receipts. This is the main revenue stream for most cities and municipalities. In some areas, sales tax is running 25% less than the same time last year. New projections indicate an increase in lost revenue if, in fact, major sporting events continue to be canceled. Conventions and special events in certain cities account for 10% of their gross revenues. Federally backed municipal bonds could reach trillions of dollars. The federal government will be tempted to only issue such guarantees with unacceptable conditions.
Another potential concern is the tendency of government to want to provide direct government checks to individuals. This is perfectly appropriate in the short term. However, supporting small business owners through expanded payroll protection is a better long-term course. If the government pays employees directly, then the small business owner is simply a middle manager for the government.
The federal government taking control of individual income and funding municipal needs with conditions must be resisted.
What matters, of course, is the safety, health, and well-being of every living soul in the world. The pressure and anxiety on families in certain corridors is almost unimaginable. Standing in line for food takes longer and longer. Not knowing, as head of household, how one is going to provide food for one’s children is the most excruciatingly agonizing natural emotion resulting from a universally unnatural destruction of societal systems.
Therefore, on what are we to contemplate and focus to establish a plan of hope?
The first step is to stabilize every family. Food, shelter, healthcare, and clothing must be provided as needed, no matter what it takes or what it costs. We must see the world today as the 4th century Christians saw their world then. Anyone who asked was told, whatever you need, you can share in what I have. No questions were asked. It didn’t matter whether you were Samaritan, Judean, or Philistinian. It didn’t matter whether you were Jew, Christian, or Roman. Everyone was not only welcomed, but loved and provided for without judgment.
Whatever the cost, the price must be paid without question.
The second step is reopening the economy as soon as possible. It will not be business as usual. Protocol for safety will be required. It will be at least a year before there is comfort and confidence in normal activity. The cost of a controlled reopening must be considered in the overall economic calculation.
A new normal will be reality for a period of time. But it does not have to be an enduring reality.
The third step is the Great Reset. During the stabilization period, it is time to rethink all we have learned about economic structure, government policy, and debt, both government and individual. To carefully reflect on what we desire for liberty, freedom, constitutional rights, equality, and the unfettered pursuit of happiness through economic prosperity, is the mission statement for designing the Reset. We have many historical lessons from which to draw. Our founding as a nation in 1776, the Civil War, the Industrial Revolution, the Great Depression, and World War II all resulted in Resets that changed forever generational relationships with government.
The Reset should be a vision, a guiding light, a map for a destination that will provide a moral compass for the journey. To fully realize this Reset will require a generation. The consequences of total spending on the first and second steps may be the equivalent of the entire GDP of the United States. The amount of dollars added to the money supply will itself necessitate careful policy planning to accommodate.
A Great Reset is coming, one way or another. It is critical that we as citizens design the future we desire rather than simply subject ourselves to random outcomes.
The fourth step is understanding the reboot. Rebooting all activity, not just economic, will require patience through trial and error. Costs and inefficiencies will be ongoing. As long as there is a visionary map for a desired strategic destination, progress can be measured by the milestone achievements of the Great Reset.
Some changes will become a new reality. Online purchases will accelerate. Zoom meetings from home will become regular events. Priorities in consumption will change. Savings will increase. Small businesses will realign. Corporations with more cash than debt will buy out competitors. Healthcare will become more virtual.
In the reboot and execution of the Great Reset, perseverance through the mission and acceptability of natural change will test the character of America.
Every country in the world will face the same challenges in pursuit of their own Reset. China is positioned to profit from the virus that started in their country. Their businesses are now up and running to 80% capacity. They are somewhat like the United States following World War II. They are the first economy back up and running. This, of course, adds to the conspiracy theories that their lack of transparency shrouds a deeper secret. Whether China has a larger fingerprint on this pandemic or not, where we find ourselves today is where we find ourselves (it is what it is).
America has an obligation not just to itself, but to the world to protect liberty and freedom in the coming Great Reset. The world seeks our leadership.
"Like all crises the Covid-19 calamity will pass and in time a fresh wave of business energy will be unleashed. Far better if this is not muffled by permanently supersized government in a new oligarchy of well-connected firms."
The Economist, April 11th-17th 2020
My name is Marc Nuttle and this is what I believe.
What do you believe?