Why is business still bad?

Why is business still bad? Because corporations cannot earn profits and the system does not allow them to make a profit.

Not only corporations but also nations and households are in deficit. Nations, households and corporations are heavily in debt. The economy is in an extremely poor state. Why are corporations, nations and households in debt? The problem is the system.

If the situation is left as it is, the free economy will undoubtedly collapse, leaving environment and energy issues behind as a parting gift. This is because the present system denies the market, rather than because capitalism is wrong.

Though we have benefited from the market, we have given it little courtesy and so are now paying the price.

As to the future direction, should we choose the NFL or MLB? NFL is the world’s best economic system that the U.S. has created.

Laissez-faire means to let the market go unchecked. On the other hand, controlling and planning deny the market.

If the market goes unchecked, monopoly or oligopoly would result, which would signal the end of the market. The market is a human-induced system, and is maintained by finely-balanced mechanisms. Leaving the market in its natural state is like abandoning control of the market.

Conversely, if the market is controlled, its functions will not work.

The market should be protected, which means it should be regulated and controlled.

People sometimes have the wrong idea about planning. Planning does not mean to plan economic activities directly; rather, it means to construct and control the market system according to a program.

What the economy needs now is not a sponsor or controller, but a judge and a guardian.

There is a problem not in the ability, but in the system. Even now, the ability of the U.S. is the best in the world, and there is no other county that has the ability to replace the U.S. The problem lies in the system of the market.

Structure Economy aims to create, in a well-planned manner, such a system that allows nations, corporations and households to earn profits.

p.s.

A problem in strengthening the foundation of the credit system is refund guarantee. The key point is not the purchase of bad debts but refund guarantee. Namely, the focus should be on the contents of debt. This concerns the housing issue and those on low incomes.

If bad debts are simply purchased and released on the market, the housing market might slump. We must remember there is a shortage of houses for low-income earners.

It is necessary to reconsider the original purpose of subprime loans, which was a shortage of houses for low-income earners. The keywords here are low-income earners and shortage of houses. In addition, ability to pay, shortage of mortgages, and means of payment are three important elements.

The keywords are aggregate liabilities, profit and loss, and cash flow. Annual income and expenditure, and the eventual loss, are important rather than aggregate liabilities. The problem is how much can be recovered. The problem is not the mere reduction of liabilities of financial institutions. Profit and loss should be set up in line with the cash flow, and also based on the capitalization method.

If there is a shortage of houses and problems in ability to pay, one solution is to purchase houses and shift them from bulk sale to rent.

It is also important to try to raise the incomes of those on low incomes. The best solution is a policy of turning around the overall economy rather than launching public work projects or taking guarantee measures.

　　　　　　　　　　　　　　　

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