Fiscal cliff? What’s that?
I asked Professor Mankad (Sir). He explained it to me in detail. I loved learning that big picture from him. I must admire President Obama for the way he has put in his plan. Everyone in US Admin knows that “We are in trouble”. But how to get your idea win, should be learnt from Obama & Team.
When Sir explained whole thing with immense patience, I thought about what could be the solution. Sir also suggested that what are the possibilities and what could be the likely future? I felt – we are (going to be) in deep trouble. Sir suggested that this trouble could be even deeper, longer and disappointing than the 2008 melt down.
I’m scared. For all such troubles I always look at the other side as solutions. OTHER SIDE here means socialistic approach to solving capitalistic problem. I smsed Sir – could “Sanjha Chulha*” be the solution? It would help provide few jobs for people in Sanjha Chulha and reduce expenditure of unemployed on food. When that happens, Govt can reduce expenditure of unemployment benefits.
*Sanjha Chulha means community kitchen.
The other approach I thought was using TRIZ. Actually that is what Govt must be doing (without the jargon of TRIZ). Before discussing the solution framework, a brief on Fiscal Cliff (Details – About link and Wiki link).
Fiscal Cliff – is a deep impact due in the budget of Govt. Because as per “Bush tax cut” (of 2003) the taxes would increase at the same time Govt has to reduce spendings e.g. unemployment benefits offered for 99 weeks would reduce to 52 weeks, defense budget reduce by say 50% etc. All of this would result in recession in the USA. The challenge for Govt is – how to control it? Fiscal Cliff is also a function of debt reaching a ceiling % of GDP.
In TRIZ there is a solution type for such issues. That is named as physical contradiction, which means you want something and you dont want that at the same time. You want Tax cut and you dont want that. You want reduced expenditure but you dont want that.
Simple solution is – “increase ceiling debt as % of GDP”. Other solution would be, TRIZ offers solution by separation principle.
1. Separate tax collection based on condition. This is tried arguement is on tax ceiling (Obama says 400k, Congress says 1M).
2. Separate tax collection based on organization vs individuals. In TRIZ it is kind of separation of parts Vs the whole.
3. Separate tax collection on time. This separation could be coupled with solution 1.
1. Separate spends based on condition. spend ceiling on spends of different types
2. Separate spends based on community vs individuals. Healthcare Vs unemployment benefits
3. Separate spends on time. Delay spends which could be avoided.
For testing all these ideas a very simple mathematical model and “goal-seek” of Microsoft Excel can be used. (Though its not that simple – but who wants to complicate things? Objective is to simplify life) politicians/consultants like complexity, who can leverage it.
Relevant news Euro debt reaching 90%
Related blogs –
1. Double dip
