How do we shorten the economic crisis?

Why will there be an economic crisis after the corona crisis?

Because of the corona crisis, people had to stay at home. So they could hardly spend money. If people spend their money more slowly, companies will receive their income more slowly. Their turnover is falling. As a result, they are going to suffer a loss. If they start to lose, they will spend less. One can do less, for example, by firing people. The income of those who are unemployed is falling. So they are going to spend less again. The amount of money in the economy remains the same, but the turnover rate is decreasing.

How do we get out of the economic crisis?

The size of the economy is determined by the amount of money and the speed with which it circulates. After all, a euro that you keep in your pocket does not contribute to the economy. Money must flow.

We can now try to keep the size of the economy the same by letting the ECB create money. The ECB can create this money at the touch of a button. If the ECB then lends it to the member states, they will be able to sustain their economies.

Pulsating money creation

A healthy economy has a healthy amount of money and a healthy turnover rate. The ECB influences both. It is not that the ECB only creates money. The ECB also destroys money.

If member states repay the money they now borrow from the ECB, money is actually destroyed.

Role of the ECB and role of politics

The ECB should be able to independently determine how much money is created and how much is destroyed. The ECB can make money available to governments free of charge. If the economy grows again, not all the money created needs to be destroyed. It can then be determined that not all the money created needs to be repaid. But who is going to determine which country should pay off and which country will (partly) not?

Some countries’ economies are now ill. A doctor is not going to distribute medicines fairly among all people. The patients receive the medicines, the healthy people receive nothing. However, the doctor can say: “then you should stop smoking now”. For example, countries with a weak economy may now be supported by the ECB and may be required to change their policies. In this way, the economy of all of Europe will remain healthy.

In a democracy it does not seem to me to the ECB to make the demands, but directly or indirectly to the European representatives.