USA Requires Massive Stabilization and Not Transformation
Posted on 06 July 2020; 07:00 PM IST. Last Updated 06 July 2020; 07:00 PM IST.Summary:USA requires a massive amount of stabilization, to get back onto track. The extraordinary efforts of Americans since WWII, have secured the “World Leader” title and position for the country. The Novel Coronavirus (covid-19) destabilized the position of USA, to a significant extent, but this could be a transient phenomenon, and the virus could in all probability dwindle and disappear by December 2020. The current and the next administration (after November 2020 elections), must therefore concentrate on re-stabilization, and not transformation.
USA stood as “World leader” in almost all spheres of activities, before the Novel Coronavirus appeared in March 2020. All most all sectors of US industry were destabilized to a significant extent, by the virus. The task on hand for the current and the soon to appear next administration (after November 2020 elections), is to focus on re-stabilization.
The Novel Coronavirus could have destroyed the vigour and activity of the nation, but the country must hold on to its faith and good spirit, during this testing time. If people follow the prescribed rules meticulously, the Novel coronavirus could in all probability disappear from USA, by the end of the year (December 2020).
Some of the re-stabilization activities required to get back on track, are described below.
- Finance: Industries would require financial stimulus as deferred tax plans, with extensions till 2022. A staggered tax plan, with 50% tax payable in 2021, and the remaining 50% in 2022, or a similar plan would be most beneficial.
Individual tax could be lowered, when the gross income is below a threshold, such that it protects the poor, but taxes only those who are in a position to pay. This could work better than tax-slabs, as Government needs all the funds it could accrue.
- Trade: In the current scheme, import taxes are simply passed on to the consumer, or the next partner in the supply chain, resulting in a painful domino effect.
Imposition of import tax on Manufacturer Suggested Retail Price (MSRP), instead of import price, along with restriction that final retail price cannot deviate more than 10% of the MSRP, would protect consumers and the supply chains.
Price fixation of MSRP of a product, by type, manufacturer, and quality, would be required to implement the scheme.
- HealthCare: US health care is fairly robust, and Trump Care is not all that different from Obama Care, but could have corrected a few anomalies of Obama Care.
With a vaccine on the horizon for Novel Coronavirus, the implications would be “free administration” of the vaccine with Private-Federal partnerships, which must be carefully nurtured and built ahead of time. The administration must invite private companies to bear the burden of cost and administration of the vaccine.
- Housing: The greatest misery that befell on middle and lower class workers, due to Novel Coronavirus is the loss of employment and housing. This double tragedy was reportedly the most painful.
Housing is a complicated story, and the amount of finance required to support the housing of the unemployed could easily overwhelm the already beleaguered nation.
A rudimentary idea that may be studied further is to let banks provide loans for the cost of rent from March 2020, to December 2020, at the cheapest rate possible. The federal government should absorb the interest of the loan for a period of two years, but not the principal. If the principal of the loan could not be repaid by the receiver in two years, then the balance is repaid by Social Security, and the unpaid balance becomes a negative transaction against the Social Security account. Future Social Security contributions would erase the negative balance, as and when they happen. The scheme works like an interest free loan from Federal Government for 2 years and Social Security thereafter, provided the receiver has already contributed some portion (to be decided) of the the principal amount to Social Security.
- Social Harmony: The Novel Coronavirus has managed to destabilize the social harmony, in many nations. The loss of employment (and lack of a source of income), could fuel distress, across a wide range of population. Educating people on how to cope up with the loss, and to get back on track, is therefore an important part of the re-stabilization process.