By Harry Langer,
HJ Langer Real Estate
Consideration should be given to an emergency program to stimulate weak key sectors of the U.S. economy and correct bubbles in other sectors.
There should be an increase or reduction of the money supply and/or interest rates to each sector, and/or their various sub sectors to improve and grow the economy, create jobs and revenues, promote innovation, and minimize bubble risks.
This program would have a sunset provision.
Eligible Economic Sectors: all fields of high-technology; research and development; automation; productivity improvement; and innovation (advanced computing and communication systems and devices, software products and systems, electronics, nanotechnology, ceramics, magnetics, genetics, biotechnology, chemistry, vaccines, clean and renewable energy, environmental protection and conservation, robotics, advanced machine tools, etc.), scientific education and skill training, residential and commercial construction; nuclear applications, safety and waste recycling; aerospace and drones; clean and alternative energy; efficient automobile development; crop yield improvement; infrastructure, repair, maintenance, and improvement; regional transportation networks; power grids; water conservation; etc. Flexible Selective Sector Credit Stimulation Recovery Policy would be set by the Executive Branch (the President and his Administration) carried out and supervised by the Federal Reserve Board, and administered by the Federal Reserve Regional Banks who are familiar with the economies and needs of their individual regions.
In turn, these Federal Reserve Regional Banks would utilize qualified local banks or branches of national banks to place and service said dedicated loans on a modest fee basis to qualified and collateralized borrowers on pre-set terms and conditions and subject to their approvals.
Using the Banking System As Operating Instrument: Banks access to low cost funds from the Federal Reserve Open Window Facility would be conditioned upon their compliance with this dedicated lending policy set by the Federal Reserve Board and the Administration.
This dedicated lending would be confined to the U.S. for specific purposes: relatively short-term capital investment in plant upgrades and new equipment for greater productivity and enhanced global competitiveness; research and development for innovation and market creation, job and revenue growth; relevant skill and apprenticeship training; and expanding domestic and export production.
These loans would be subject to approval by the Federal Reserve Regional Bank having jurisdiction. Capital investment could be leveraged by faster depreciation schedules.
Also, promote domestic insourcing, when and if needed, for national job and revenue growth.
A Selective credit stimulation policy could be an effective cost free tool for economic, job, and revenue growth.