Supplying Economics on Demand
Three percent sounds like a small number, but it is not quite that tiny when discussing economic growth. Considering we had a gross domestic product of 18.46 trillion dollars at the end of 2016, even the smallest percentage fluctuation is significant. Currently, the U.S. economy’s growth rate is wavering around 2 percent.
President Trump claimed throughout his campaign that he could help our economy hit that 3 percent. He has even gone as far to say that we can hit 4, 5, or even 6 percent growth. Yes, between 1948 and 2005, our annual economic growth rate had hit 3 percent two-thirds of the time. But since 2005, it has not risen above 2.7 percent. Additionally, the Congressional Budget Office and other forecasters are predicting an average economic growth rate over the next decade that won’t even hit 2 percent.
On Nov. 8, 2016, Indian Prime Minister Narenda Modi made an unexpected announcement for demonetization. People had about 50 days to turn in their 500 and 1000 rupee notes, representing approximately 86 percent of India’s currency, for new currency notes. Demonetization moved India towards a less cash-intensive society while also temporarily halting the economy.
Why demonetization? One goal was to promote modernization. Modi believed that businesses could become more competitive with electronic payments. Another goal was to keep people safer. Keeping cash in drawers makes homes more attractive targets for robbers. The most important goal, however, was to combat corruption and tax evasion.