Business
Administration Needs to Assist the Economy Recuperate From Sandy
If natural calamities such as the most recent Hurricane Sandy become more frequent in the coming days, which simply implies that their associated consequences would become even more expensive, the federal administration needs to undertake more dynamic countering measures so as to minimize the possible huge economic destruction, and assist economy to recover swiftly.
Particularly, in case of economic revival, there is actually something more that the United States administration can accomplish. There are a few measures that seem extremely small and evident, but still very valuable. To its credit, the present government headed by the President Obama has made considerable advancement in reducing disaster aid red tape, for instance.
Yet, the patchwork of the general application necessities, and eligibility standards industries should be given some proper attention from the federal so as to streamline the disaster aid flow to all organizations effectively. In fact, it even makes more sense to identify any particular agency run from the Federal government as the wholly responsible for the general economic disaster relief.
No matter which agency assumes the lead position in this regard, it must have a constant, ardent flow of funds on hand to swiftly react to any form of natural calamities. It has been said that the IEDC (International Economic Development Council) suggests the “Economic Development Administration” owned by the Federal Commerce Department to assume responsibility to providing proper assistance at times of natural disasters, and work hard towards swift economic recovery.
The IEDC recommends nearly $100-million to be set aside as a dedicated natural disaster relief fund. This would set aside funds rapidly, and greatly assist separate economic calamity relief from any kinds of political maneuvering. According to a recent survey conducted by the St. Louis based Federal Reserve Bank, in terms of financial strategy, in most instances the Federal Bank must actually raise its nominal rate of interest target, following a natural calamity.
Whenever a disaster hampers capital, and substantially reduces production, firms generally react by escalating prices, and recruiting more employees. This kind of approach results in a period of considerable low output, and greater than anticipated inflation and employment, which would typically permit greater rates of interest.
If the rate of inflation stays low, and redundancy stays constantly high, it’d precisely be counterproductive at present. But, the Federal Government should not extend its quantitative lessening program further than what it has previously declared, or remediate to more striking financial strategy such as purchasing municipal bonds on an extensive scale.
