Image source: taken from Baidu Gallery
As mentioned earlier, under the current downward pressure on the economy, the government should dare to spend more money to promote economic recovery. It also talked about the government's spending money to adhere to the four basic principles of common prosperity, embodying fairness, efficiency, supporting basic research, and scientific and technological innovation. In addition, I personally believe that we should pay special attention to the structural effects and long-term impact of macroeconomic policy .
When the economy is facing recession and depression, mainstream macroeconomic theory (new Keynesianism) believes that the government should use policies carefully to offset the economic impact forces and adjust the policy direction and intensity in a timely manner according to changes in the economic situation. The government's macroeconomic policies include fiscal policy and monetary policy. fiscal policy tools include: (1) reducing the actual tax rate; (2) increasing the level of government expenditure. monetary policy tools include: (1) open market business and repurchase of government bonds; (2) reduce bank reserve ratio; (3) reduce discount rate and bank benchmark interest rate .
The current combination of macroeconomic policies implemented by my country is: loose fiscal policies and prudent monetary policies, and no flood-style economic stimulus policies. Under this main tone, the finance side: (1) Significant tax cuts and fee reductions. According to data released by the State Administration of Taxation, as of July 20, tax cuts and fee reductions and tax refunds and tax rebates have exceeded 3 trillion yuan this year. (2) Significantly increase government expenditure, with the planned infrastructure project reaching more than 14 trillion yuan. (3) Increase transfer expenditures and alleviate the difficulties of micro- enterprises and disadvantaged groups in . In terms of currency: (1) Reservoir reserve requirement ratio cuts and interest rates have been cut several times. After the central bank announced on April 25, 2022, the weighted average reserve requirement ratio of financial institutions was 8.1%, which was in the most relaxed cycle in history.
Image source: Internet
At present, it is reasonable and inevitable to support the economy, relax monetary policy, and join government expenditures and investments. What may need to be noted are the fiscal expenditure structure and the investment structure of the government (including state-owned enterprises), that is, where should the funds be invested and which industries?
The author believes that the following aspects should be considered mainly:
1. Relieve difficulties for families and unemployed workers;
2. Relief for enterprises with difficulties, focusing on supporting small and medium-sized enterprises;
3. Increase funding for basic theoretical research and technical application development research;
4. Increase infrastructure construction, focusing on investment in new infrastructure ;
5. In terms of traditional investment, the construction of water conservancy facilities and rural infrastructure construction.
6. In terms of monetary policy, we must find a balance between maintaining growth and preventing risks and inflation. The general principle of
is to combine short-term solutions to problems and long-term investment effects. It should not only benefit the current people's livelihood and prevent risks, but also focus on the future to achieve economic structure transformation and promote my country to quickly embark on a new path of high-quality development of .
Image source: taken from Baidu Gallery
