FIN; CRISIS & A New Concept: “NATION’S SPENDING CAPACITY INDEX”

FINANCIAL CRISIS, A New Concept: “NATION’S SPENDING CAPACITY INDEX”

-----------------------------------------------------------------------------------------------------.

I have analyzed financial crises of one country after another: USA, Eurozone Nations. China (also having high trouble of overheating economy, inflationary pressure, as there has been excess forex buildup resulting into & contributing to crises for other nations’ economies), also India is under impending financial trouble due to excessive money printing by Indian Central Bank for funding populist Govt Schemes, I have come to develop a New Concept, unthought-of so far, the concept as I have named “Nation’s Spending Capacity Index” (NSCI).

It has been imperative to create “Nations Spending Capacity Index” (NSCI) for each country i.e. for all countries, be it poor or rich, which will be an index or a pointer to, how much is a nation’s capacity to spend i.e. the capacity of a given Govt  to spend in a given economic scenario!

That is, how much a Govt is capable to incur budget deficits or resort to debts, so that any financial crisis can be averted, as it (the panel) will caution & alert the concerned Govt through this index i.e. “NSCI”, its capacity for incurring deficits & debts, so that a Govt does not fall in an irretrievable pit & future financial crises can be averted.

In this way economists will also have an active & a real say on a Govt’s capacity to bear deficits & debts.

A panel of eminent economists shall be constituted by each country (mind, not the rating agencies, which fail to do this & which only rate, that too after a disaster occurs), that panel will monitor or issue standards & specific figures to the Govt & public, that a concerned Govt how much in a position to incur a certain amount of deficits or debts in a given scenario.

It will make every thing very transparent & scientific and also involve economists actively to advise on the dangerous situation the world is facing today, beforehand, Govt’s will be free to choose their advisory economists for the panel.

I think this new path breaking concept of “NATION’S SPENDING CAPACITY INDEX” (NSCI) will dramatically change risk factors of a country that it may face.

(Note: I write my theories & concepts in short as I am a banker & have little time to write in a book like or research file like form, but I do feel these theories & concepts must be circulated for the good of the world & people, anyone is free to elaborate or write on them)

Subhro Das

Conceptualized 25/8/11, Written 26/8/11