Why Did the Chinese President Condemn US Monetary Policy at Davos and the BRIC Conference

When we start looking at the political posturing around the world, we see world leaders and their advisors making serious mistakes. The President of China made a huge mistake when he condemned the United States of America at the Davos World Economic Forum. Now, it is true that there were many people upset with the Credit Default Swaps, and to the Mortgage Bundles that helped bring down the global economy.

Still, the president of China owes the United States a great sense of gratitude. If it were not for the US middle class consumer, China could not have experienced the 10% GDP growth year-over-year that they have for the last two decades. In fact, China would not have the third of fourth largest GDP of any nation on this planet if it weren’t for the United States buying all of their exports.

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Fiscal and Monetary Policy, and How They Affect the Economy and You

The key to a smooth running economy is having sound fiscal and monetary policies. We need policies that can be changed over time to better serve our economy as a whole. The United States economy has had its ups and downs, and the economy is definitely in a downward period now, but fiscal and monetary policies can be adjusted to fit what is best for the United States. To really understand the United States economy and understand the issues arising in the news lately, an understanding of the basic concepts behind fiscal and monetary policies is necessary.

Fiscal and Monetary polices are tools that the Federal Reserve Bank, and the government uses to help keep the economy running smoothly. The United States has had periods of hard economic times since the beginning our country’s establishment. The United Stated has had recessions, but our economy has always been able to come back relatively quickly. The Great Depression during the 1930s started as a recession and bank crisis similar to today, but because of an initial lack of government presence the recession evolved to a depression. This was a big turning point of the United States government when they learned that they needed more than just fiscal policies. The United States realized that monetary policies were just as important as fiscal policies. By having both fiscal and monetary policies it would help to prevent another disaster like the Great Depression.

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A Sustainable National Monetary Policy – I Want to Invest in America

Faced with the dilemma of financing WWII President Franklin D. Roosevelt received adamant advice to raise taxes and introduce a forced savings program.  Instead, FDR wisely followed the advice of Secretary of the Treasury Henry Morgentthau, JR., who working with Peter Odegard, a political scientist specialized in motivating masses (read propaganda) created the War Advertising Council.

The result was a whopping $187.5 Billion ($2.5%2B Trillion dollars adjusted for inflation into 2009 dollars) to fund the war effort.  Just as important as the money, the War Bonds became a rallying cry for the public to express its patriotism, follow its iconic leaders’ calls for action, and allowed for 85 million Americans to actively participate in the War effort.

» Read more: A Sustainable National Monetary Policy – I Want to Invest in America

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