Post-2008, 'stimulus' to the
economy has been the most widely used word - by economists, analysts, bankers,
businessmen and news readers. An unprecedented and coordinated action by central
banks the world over saved the financial markets from brink of collapse and put
the world economy back on a dilapidated growth track.
Quantitative easing was leading
the stimulus package with fiscal inputs complementing it. Things became much
better in 2009-10-11. Now there is again talk of quantitative easing number 3
in the US. In the Euro zone, developed nations are being saved from sovereign
defaults. The survival of some nations in the Euro zone is in doubt. China has
poured billions of dollars in its economy to stimulate its domestic
consumption. Back home in India, there are calls to reduce interest rates. And
a call to remove CRR to increase money flow. The Mahatma Gandhi National Rural
Employment Guarantee Scheme acts as the fiscal action following the Keynesian
principle of government intervention.
The point of note here is that
everyone wants money flow or rather volumes of money at their disposal to grow.
An improvement in fundamentals is not asked for but an artificial resuscitation
is looked as the solution. Short- term solution without its long-term
implications. I don't remember it but someone did say that this is like a drug.
There is no looking back from this vicious cycle.
Does it not convey the current
psychological state of man where immediate material pursuits are sought at the
expense of wellbeing. Everyone is under pressure to perform. Stock markets
panic on a day where it opens in red. There is a thread-bare analysis of
anything and everything even though it might not yield any concrete
understanding.
Everything is like fast-food.
Instant gratification is sought continuously.
The rich are getting richer.
Middle class fights to be in this class. And the poor get poorer inspite of doing
all the fieldwork. What is the world going towards? A downward spiral from
where the only way is down because it is all artificial. Natural growth is
nowhere close. No one wants to go up the hard way. Inflation is going to be a
perennial affair and how much every banker says that it will be controlled, it
isn't happening due to this huge paper money flow.
I shudder to think what would be
the state of economy a decade from now. Artificial stimulation would be the new
normal. And the printing press will continue to work overtime!
No comments:
Post a Comment