Joseph and Tyler Michigan

The Economic Crisis

A problem and proposal about the economy

Dear Next President,

Congratulations for your success in becoming the next president. We understand as president; there are many responsibilities and problems that will occur during your term, and it will be impossible to solve all of them. However, if you look into the issues and concerns of the people, most of them are related to the economy, specifically inflation. The only way to stop this problem is to increase to limit the circulation of cash and its production. This proposal will lead to deflation, lowering the prices of goods and services while increasing the value of the USD on the world scale. This would stimulate the economy by increasing more investment towards American trade, more exports, more investment in our stocks, and increase our currency. By this increase, we would be able to pay our debts with less money, so our debt would decrease.

Limiting the circulation of cash and the production of money will cause deflation. At a mere glance, people might panic, however, as you know it will be a catalyst to boosting our economy. Limiting the amount of money in society means that there would be an increased value of the dollar due to its scarcity. This wouldn’t affect the working place due to labor union contracts, so the employed will face a salary cut. Also, this means that the government can give out less money as welfare because there is less money to go around. Prices will drop for goods and services as there is less money stream in society, causing more people to spend. This would help many businesses and boost many of them, stimulating the economy.

Creating deflation would increase the value of our currency. This causes many benefits for the U.S economy, and one is that it limits our debt. Restricting the amount of money in the form of cash will decrease the interest rate of debt, and it lowers the value of the debt. As countries pay off their debt from other countries, the money gets converted to the other country’s currency. If deflation can overcome our inflation and strike it down so that the dollar is worth more than the Yen or Euro, then we would be able to pay off our debts to other countries and public sectors much more rapidly.

Limiting the circulation of the dollar also causes an economic boom in foreign trade. At first, traders and speculators may recognize this as a threat to the economy, because of increasing the exchange. However, as the currency stabilizes into a high-value currency, foreign speculators would rely on this currency and invest in businesses and stocks based in the US. This speculation towards American companies would cause more revenue, which would lead to manufacturing more of the product or more performance of the service. These companies would need more people to perform these tasks, so more jobs would be needed in order to build upon the corporation, which would decrease the unemployment rate. There are downsides to limiting the amount of money in circulation. There is a chance that consumers may hold onto their money and spend less on non-essential items. Deflation also increases the real value of debt, making it harder to pay off. Just as real debt rises, so do real interest rates. Real wages rise during times of deflation and could raise the level of unemployment.

Before you attempt to initiate any reforms, dear president, think about the current issues that implicate many predicaments which ultimately harm our American government and society, which is inflation. Using your executive power, you can start an amelioration to improve this nation by enhancing the value of the dollar. Other dominant sectors of society and the government cannot perform this task. Through this, not only will you attain a name left that will be remembered, but you will save the people and this nation from falling into an economic crisis.


Joseph and Tyler

Okemos High School

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