AU Press

Optimal Money Flow’s important message and unique proposals deliver a fresh view of the interconnectedness of the globe and an updated understanding of the underlying economic forces that shape our lives today—including international trade and how one country’s decisions now impact the rest of the world. From business travelers to university students, readers will rethink their basic assumptions about the nature of economics and the role of government.

Summary:

An abundance of stimulating, fresh ideas await readers who appreciate books at the intersection of economics and politics. One of many such ideas in Lawrence Marsh’s new book, Optimal Money Flow, is his “My America” personal accounts, into which the Federal Reserve Bank could inject money as a way to get the economy moving when growth is slow.  This provides a new policy tool that can serve as an alternative to the Fed buying US Treasury securities in New York financial markets that lowers interest rates and boosts stock and bond prices. Instead, a “My America” account would be created for every American where money could be injected directly to provide consumers with cash to stimulate demand when the economy slows. Conservatives will like the idea of allowing the people instead of the government to decide how to spend the money and that this approach does not increase taxes or add to the national debt while avoiding excessive inflation through prudent monetary management. It also uses less money and has a more direct and immediate impact on consumer demand that the purchase of US Treasury securities. 

Marsh introduces his innovative Money Flow paradigm, which sees government as the heart of the free enterprise system—and where it does and should play an active part in maintaining and ensuring efficient and equitable resource allocation in an economy. Previous economic paradigms viewed government as an external, alien force outside the system, but professor Marsh promotes a very different approach. While he acknowledges there is efficiency in the market for ordinary goods and services, he sees contagion effects and inefficiency in many financial markets.

With higher levels of globalization, low levels of unionization, and more rapid technological change, a new type of business cycle has emerged—one in which rising middle-class debt and stock market bubbles have replaced price and wage inflation as the source of economic instability. Marsh believes government can contribute to the efficiency of the free enterprise system by better aligning marginal costs and marginal benefits, and that in the long run, government can greatly enhance efficiency, productivity, and economic growth.

Optimal Money Flow’s important message and unique proposals deliver a fresh view of the interconnectedness of the globe and an updated understanding of the underlying economic forces that shape our lives today—including international trade and how one country’s decisions now impact the rest of the world. From business travelers to university students, readers will rethink their basic assumptions about the nature of economics and the role of government.