The US economy is in a critical state ( Mark Faber rightly calls it “TERMINALLY ILL”) and President Trump has to deliver on his promises to Americans. One of Trump’s Campaign promises was that he is going to increase competition between insurance companies in order to provide health insurance to all Americans. Well, Tomorrow the GOP is going to repeal the Affordable Care Act or Obamacare and replace with a new health care plan. Let us call it “Trump-care”. But, the question arises why is Trump so much for repealing the affordable healthcare act. Well, No doubt that it is very expensive and the rich are paying huge taxes to pay for health insurance for those who cannot afford it. Well, Indeed if you consider that Rich pays for the poor, it becomes socialism. Any kind of re-distribution is called a socialism. Hence, President Trump does want to replace the Affordable Care Act. However, The monopoly of Insurance Companies is yet to broken. There is a monopoly of big insurance companies in the US…As a matter of fact there exists a monopoly in several industries in the US.
Without breaking the huge monopolies in every industry, it is impossible to restore free market economy in the US. Without free market economy, the size of government cannot be small. And without smaller size of government, there cannot be lower income taxes on all.
Hence, The step by step approach for Trump to repeal and replace Obamacare with Trump-care would be
- 1. Enforce the Sherman Anti-Trust Law and break huge corporations in every industry.
- 2. Restore Competitive Capitalism or free markets such that there are minimum of 10-15 competitors in the every industry,
- 3. Replace the Federal Reserve Chair and entire FOMC so that they follow a monetary policy that supports free market enterprise in the financial sector of the economy.
- 4. By enabling competitive capitalism in every industry would also automatically make health insurance and cost of living affordable as there would be a competition to reduce the prices for customers.
- 5. Eliminate the trade deficits by either manipulating USD exchange rate to increase US exports or by imposing an import duty on cheap imported goods, which creates unemployment in local economy.
- 6. Eliminate Budget deficit by following a balanced budget option. If Trump wishes to give tax cuts to all and wishes to minimize the size of government then President Trump has to start the process of economic decentralization by creating strong local economies. That is the only way that taxes can be cut across the board. Without a decentralized economy, any attempt to cut taxes for corporations or wealthy would leave a deficit in the economy. And, Deficit would cause the rise in National Debt.
- 7. To permanently eliminate the intervention of Politicians into the economy in the future and have a sound monetary policy, once Trump ensures that wages of Americans grow in proportion to their growing productivity, the USD should be gradually backed by any available GOLD. The advantages of having GOLD back currency far outweigh its disadvantages. As long as both supply and demand grow by ensuring that wages grow in proportion to growing productivity, the amount of GOLD really does not matter. Only thing is that it will put a halt on deficit financing by printing currency and lead to a balanced economic growth.
- 8. With such free markets and employee owned businesses, the health care would be accessible and affordable to every American as the taxes would be low, the purchasing power would be high, competition in the economy would also be high. The employee owned businesses will provide excellent quality and low cost insurance to their employees at Group Insurance Rates.
- 9. If Trump adopts economic progress with a productive utilization of technology, he can exponentially reduce the US national debt by sustaining the progress of Moore’s Law with a few recommendations provided in my third volume with Business Experts Press.
Any attempt by Trump administration to repeal the Obamacare and replace it with something that does not cover pre-existing conditions of Americans would not only be a violation of one of his campaign promises, which would leave Americans uninsured but would also be an immoral thing for any president to do in such a horrible economy with a huge unemployment and poor standard of living of citizens.
Just take the case of Apple Inc. Apple Inc. is reported to have 258 Billion USD in cash reserves. If such huge cash reserves are not invested by companies like Apple Inc. , it does not help in creation of jobs. But, the un-utilized money is also bad for Apple Inc. The more that the money remains idle, the more it loses its purchasing power but the more the money circulates, the more it increases purchasing power of all individuals through whose hands the money circulates.
The primary reason that companies like Apple Inc. are not investing into the economy is due to poor demand for their products. As consumer demand is so low because of huge unemployment in the US economy, there is bound to be very low demand for new iPHONE and other Apple Inc products. By giving tax cut to Apple Inc. to bring the money it has stashed abroad back into the US, would further increase Apple Inc.’s balance sheet. However, Apple will not invest that money into the economy as the economic demand is so poor and is expected to fall ever further. It makes no sense for Apple Inc. to invest in an economy when they know that economic demand for their products is falling. The poor economic demand is due to huge unemployment and low wages of Americans. Hence, In order to revive the economy, the wages of Americans have to grow and new jobs have to be created.
The real job creators in any free market economy are not only producers but also consumers. Producers only produce goods but they need consumers to buy those goods. In today’s Crony Capitalism, consumers are lured into borrowing and that is how producers have been able to sell their goods in spite of falling wages in the economy despite rising productivity. Based on this Analysis, President Trump can continue on his agenda to give huge tax cuts to wealthy corporations at the cost of replacing Obamacare. However, this move is not going to create jobs in the economy but would further add to deficits. Additionally, the uninsured Americans will not vote for him in the next elections as they will not have any insurance when no jobs are created as the corporate tax cut will do nothing to boost consumer spending in the economy.
President Trump has a monumental task ahead of him and I would be happy to help him if he really wishes to bring back free markets. The books below would immensely help him or any elected representative of people in any country, who wishes to work for the people.
About the Author
Apek Mulay is a Business and Technology Consultant at Mulay’s Consultancy Services. He has authored a trilogy in three consecutive years viz. Mass Capitalism: A Blueprint for Economic Revival (2014), Sustaining Moore’s Law: Uncertainty Leading to a Certainty of IoT Revolution (2015) and How the Information Revolution remade Business, and the Economy: A Roadmap for Progress of the Semiconductor Industry with More than Moore and Beyond Moore (2016). His monograph on technology is entitled Improving Reliability of Tungsten Plug Via on an Integrated Circuitry: Process Flow in BiCMOS and CMOS technology with Failure Analysis, Design of Experiments, Statistical Analysis & Wafer Maps (2016). Mulay is author of patent Surface Imaging with Materials Identified by Colors. USCIS honored him with US permanent residency under the category of foreign nationals with extraordinary abilities in science and technologies. He engineer, economist, author, blogger and social entrepreneur in an e-commerce business http://Calcuttahandicraft.in .www.ApekMulay.com
Mass Capitalism is also available as Audio book on Audible. It is being translated into local Indian language to be released in India as well as Mandarin language to be released in China.