Dear reader,
I was wondering what would be a possible consequence of funding government using the means outlined in the Manifesto of the International Capitalist Party.
The first thing that came to mind is the fact that the “National Savings Identity” would be flipped upside down. The National Savings Identity is simply that, Within a nation, “Individual Savings plus the Inflow of Foreign Capital must equal Government Borrowing plus National Capital Investment.”
Were government to be funded by the means outlined in the Manifesto of the International Capitalist Party, the National Savings Identity in a nation would be changed to “Individual Savings plus Government Savings must equal National Capital Investment plus Investment in Foreign Countries Markets.
This would inevitably lead to a positive Balance of Trade. Balance of trade being the Outflow of Goods and Capital minus the inflow of Goods and Capital. It would allow a Nation to import huge amounts of goods with no negative Balance of Trade implications. Further opening the National markets to International trade would make available to the people the production capacity of the World in the form of Goods and Services. Improve the standard of Education and the populace would be more able to take advantage of this state of affairs. The standard of living would be greatly improved.
Unless growth were to be phenomenal, (20% or more), the Capital available to National Firms that want to upgrade would be available. National GDP growth would be unrestrained by lack of Capital for investment. With Capital for Investment overseas, comes International expertise. Making International expertise available to National Markets. Again leading to reducing friction to the real growth in GDP.
It would be tough to implement, (more on that later), but the results, once made apparent, would be impetus for other countries to implement our policies.
