General

Defisite cuts, spending will it realy healp Economy revival.....

To.President Barack Obama / First Lady Michelle Obama, Date:26th-Jul-2011

Mr.David Axelrod,Senior Advisor to the President ,/ Mr.Gene B. Sperling

Director of the National Economic Council and Assistant to the President for Economic Policy,/Ms.Arne Duncan, Secretary of Education,

 

 

 

 

From:Mr.Srinivasan Giridhar, Date:06-Aug-09/18-Jul-10,Place:Bangalore,INDIA,

 

By Protocol

 

Sub: Improvising Economy........

 

Honourable Sir & Honourable Lady, & Respected Dignitaries of the White House,

As we have been seeing the various stimulus plans around the world, to revive the economy which is not giving the expected results & also running out of options to revive the economy on the whole. This has become a puzzle for all of us to solve. Why is it taking so much of effort & time to revive our economies, but things are following at a snail pace. Is there a definite reason. Yes, there are. many points to be noted 1) unnecessary expenditures like war etc. 2) the loop holes in accountability which are exploited by few vested interests. 3) Lack of understanding of ' what is economy & what drives it'.

When I began as a student of economics I had come across a great truth, about Economic Systems in the year 1980;

i.e., 'The law of Diminishing Returns'. This is the absolute truth, which is a governing factor in the field of Economics & Commerce. Also to say, it is a limiting factor to the economics, a bitter truth to be known by one & all so that we can give up on the false hopes.

The law of Diminishing Returns, workin this manner. When a business organisation starts functioning with good profits & reinvests a portion of its income i.e., putting it’s profit, back to the business, it starts growing & multiplying rapidly; if we take to plot this on a XY- axes graph, the graph rises in between X & Y-axes & shows a rapid growth in the beginning over a period of time & as the investments pour in more & more, surprisingly the graph doesn't rise instead ; it travels horizontally with respect to X axis & not realising this reason & thinking in falsehood that perhaps more investments & better administration were to be required. If this is done, then to everybody's shock the graph will nosedive without showing any rise in the profit in spite of repeated investments coming in. So what is going wrong? Can this be set right?

Well, the fact about economy as we see it today is that it depends solely and completely on ‘sustained continuous growth’. As we can notice right from the time of Industrial Revolution, economies around the world have grown to the present proportions to start with the advanced countries & to be ‘ended with’ the developing countries. Now let us examine what growth means to us; without growth factor, economy becomes meaningless. So we can easily say economics survives on growth factor solely. Though we live in this vast universe which is infinite but what comes to us which is from mother nature provided resources at hand are finite. Mankind, having taken this for granted for a long TIME; is now reaching the fag-end of the growth. There is a famous quotation from the great man GANDHI that “ the world can meet all the needs of all its people, but it cannot meet a few people’s greed”. The intricacy of this is to say that, with the present relevance, growth & development have gone to its limits & out of control. The ecology is about to be doomed, so much for our scientific advancement & prowess..

Here we will examine the systems of economies, it can be capitalism or a communist based economies or even a mixed economy having control by the state, as well as by private entrepreneurs working together to have benefits of both the systems. All said & done; manmade systems however have their own drawbacks & follies, they can never be perfect. As by default, the respective systems will collapse or fall apart by their own imperfections which are unavoidable. For instance, former USSR & the late China etc., & even with the capitalist economies world around taking toll due to unpredictable recessions, by & by which are of course inevitable. To square it up ‘communism is an even distribution of poverty & capitalism is an uneven distribution of wealth’. Having come to this understanding, let us sum it up on ‘growth factor’.

As discussed earlier about the growth-factor briefly, the growth is to be treated as healthy & beneficial when it is under control, where as,an uncontrolled growth factor is cancerous & will put an end to the whole system on which it relays., This can be very abrupt & irrecoverable. Very aptly the unmindful manmade structures of economy are devouring the very ecology in which we are all sustained. There are serious limits to growth which is a binding factor for the sudden slow down of our economies & commerce worldwide. The logic is our type of economy cannot keep on growing forever.. The limits to it will show up on its own if we do not go for a self sustaining economies, based on the very principle of recycling. Thereby the precious resources are never touched to create an imbalance nor will it be over. This very act will be our insurance for our survival.

A great caution has to be exercised in furthering our economy; which should be free from all the above mentioned drawbacks. The economy of the present style should be abandoned as it is eating up our ecology sustained by Earth like a PARASITE. Man has known this far, by discovering many parasites that which affects us; but the one which we are becoming, eating our own Earth into its natural resources is seldom noticed by many. Let’s open our eyes to these facts. As every space & scientific programmes are progressing worldwide in search of… & for harnessing material resources in the outer space, also with the intent to escape the Earth when it is no-more liveable by us, as we continue turning it to such a condition by our prosperous & unmindful economies. By this, we will get ended up like those past civilisations which vanished altogether from the face of the Earth; but with one big difference, with that of others i.e., this was all manmade in the name of economy which was greed based. This brings about a great responsibility in us to educate people on how to live on this Earth to create a perfect catalogue of it, so that we don’t abuse the nature given Earth to us, any more. All space technologies put together are only in its infancy. So they can’t promise man anything. The best bet & our only hope is to save this planet with an environment friendly economy without giving just any lip service about it.

The life expectancy of the present economy of a country like China is seven to eight years more & of a country like India, another fifteen years to go. This also shows us that stagnation is in waiting. A great deal of homework and changes in the style of economy has to be made, keeping in mind the above facts. An ancient scholar of India who was known for his prowess in the field of economics by name Chanakya, also known as Kautilya wrote a detailed text called “ARTHASHASTRA”, a perfect economy & its principles, applicable to the present day and should be consulted. A new meaning of economics should be “continuous movement but not continuous growth”. Okay I have more to say on how to go about in setting right the Economy.

Bibliography: ‘Economics’ by K.P.M.Sundaram / ‘The Limits to Growth’ by Donella H. Meadows, Dennis L. Meadows, Jorgen Randers, William W. Behrens III.

 

Humbly with best regards,

Srinivasan Giridhar

No 418,1st Fl, 18th Main Road,

4th T Block, Jayanagar, Ph: 011-91-80-26541015

Bangalore, Karnataka Email: giridhar4e@yahoo.com

INDIA. ZIP: 560041 Mob: 9902544071

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