Condolences to all those affected by the tragic events in Las Vegas and the terrible hurricanes, the earthquake in Mexico and a suggestion to help repair the damages.

Many millions of people in the US. have been tragically affected by the terrible hurricanes that swept through Florida, Texas, Louisiana,Puerto Rico, the Caribbean islands and now the horror of a mass shooting in Nevada.Mexico also suffered a tragic loss of life in the recent earthquake.

Some Canadians were also victims in the hurricanes in the Caribbean and also in Nevada four Canadians were among the 58 killed and several wounded at the concert shooting . We send our condolences to all those affected.We also send our best wishes for a full recovery to those who were hurt.We wonder whether these events like the Lisbon earthquake in the eighteenth century will cause a major rethink of the prevailing view and ideology about climate change and regulation of fire arms. The Lisbon earthquake of 1755 certainly had a major impact as Voltaire’s Candide made clear.

Let us begin with the large outstanding public debt of Puerto Rico. President Trump has floated the idea of forgiving some of that debt. That is a smart idea. The U.S. GDP was          $ 18.56 trillion (2016) The broadly defined money stock M2 is as of Aug. 2017,  $13.649 trillion. It would very easy to refinance Puerto Rico’s debt- it is about $70 billion over a fifty year period- by having the Fed acquire the debt by retiring the outstanding Puerto Rican  Bonds and gradually reissuing them a low rates of interest as the economy there is rebuilt and recovers and amortizing it over fifty years . In addition to help with the necessary rebuilding of Texas, Florida, Louisiana and other areas hit by natural disasters it would be a good idea to create a special infrastructure fund under the auspices of the Federal reserve whereby bonds which financed the essential repair of damaged infrastructure could be issued guaranteed by the Fed and where necessary purchased by the Fed. the bonds could also be long term bonds and managed to keep interest rates low. A one trillion dollar fund would be possible without having an inflationary impact. M2 has increased from 2008 by about 50 % or five trillion  without any real appearance of inflation. These measures would increase M2 by about 8 %  and help solve some problems that the US faces in the short to medium run in the  aftermath of these terrible events.

 

 

 

 

 

Advertisements

About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in deficits and debt, Federal Reserve, fiscal policy, funding essential infrastructure, Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s