Agriculture Holds the Key to Economic Recovery

                                                                                         

Did you know that agriculture and the vast plantations in the United States were the key pillars that made America as one of the wealthiest nations in the world? The huge amount of money supply that was poured in producing cotton, wheat, corn, and other valuable food crops and agricultural products propelled America to greatness. However, this was taken for granted by modern economic planners. Instead, the United States started focusing on building finance capital and speculative portfolio investments which crashed recently in a very painful manner.

The affinity of modern economic managers with finance capital, such as stocks, bonds, currencies, and portfolio investments started when the U.S. dollar removed gold as reserves to back the currency. This means the Federal Reserve can print dollars anytime without considering its real value in real terms. And because the U.S. dollar became the leading reserve standards of most currencies, it further fueled speculations in the money market and financial sector. This orientation was reflected on the educational system. More and more students left the field of agriculture and started studying banking, finance, and other non-productive fields of study. The Federal government invested on this by granting student loans to students who cannot find work now because of the collapse of the financial markets.

If student loans were invested on agriculture and the money supply was heavily invested in this sector, the United States will not be facing a hyperinflationary recession today. The strengthening of agriculture through the infusion of modern machineries, technologies, and modern farming techniques could sustain the United States towards a more robust economic growth. Instead, the money supply was pumped into the financial market to treble the speculative leverage of banking and finance capital institutions. Such overflow of money supply triggered inflation which was unprecedented in U.S. economic history. And when the market collapsed, it brought down with it the entire American economic system.

Today, inflation is everywhere and it is ruining every productive sector of the U.S. economy. Specifically, the spiral-push of inflation on basic commodities signaled greater hardship for wage earners. It also triggered the collapse of businesses due to higher production costs. The U.S. economy is contracting not because there is scarcity of money. On the contrary, the crisis was created by huge amount of dollars in circulation which are becoming worthless everyday. There is no let up to the crisis as the Federal Reserve is poised to pump more money into the economy to fund bailout projects and official stimulus spending. In effect, instead of going back to the basics, policy makers tend to exacerbate the situation by printing more paper money out of thin air.

The Obama administration therefore should take positive steps not by fueling the current crisis with more spending. The current administration should not accelerate the infusion of more fiat currency into the economy. Instead, it should strengthen the basic pillars of the economy such as agriculture and manufacturing. It should also re-implement the gold backing of the U.S. dollar to prevent the impending collapse of the buck.

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